Japan Admits It Has Entered A Triple-Dip Recession

Tyler Durden's picture

On Sunday we warned it would happen. Well, it happened.

From Goldman Sachs:

The Indexes of Business Conditions comprises leading, coincident, and lagging composite indices compiled from various economic statistics and market indicators. Since the components are already announced in advance, the composite indices come as no surprise as they can be estimated in advance. That said, the data release is closely watched as an indicator of potential turning points in the economy, as the Cabinet Office makes an assessment of the state of the economy based on the trend in the coincident CI, using a set of objective criteria that eliminates arbitrariness.


Of the 11 indicators that make up the coincident CI, 8 made a negative contribution mom in August, as expected. The coincident CI fell 1.4 points in August to 108.5 from 109.9 in July. The three month average of the coincident CI declined 0.84 points, declining for 5 months in a row, and the 7-month average declined 0.87 points, a third month of decline in a row.


The Cabinet Office revised down its economic assessment to “signaling a possible turning point” from “weakening” for the first time since April, as the 7-month average sign for the coincident CI changed, and the change swung by more than 1 standard deviation in the reverse direction. According to the Cabinet Office, such a change in assessment provisionally indicates a likelihood that the economy has already fallen into recession. This is effectively akin to the government acknowledging that the economy is in recession.


Which means Japan is now in its third recession since Lehman, and fourth since 2008.


So, triple-dip in Europe first, and now Japan. It's good to see those $11 trillion spent by the world's central banks to buy a recovery was well spent.

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youngman's picture

There used to  be a lot of falling on short swords if this happened in the old days...not anymore....

knukles's picture

It's the weather.  They'll rebound next month after the people have all paid their consumption tax.

maniacal laughter

remain calm's picture

That last chart is very bullish, How do I buy that one?

max2205's picture

The R word is so 2000's


Now it's the Disaster, Depression,  Quagmire economy


Try triple Disaster for Japan.....those fuckers will be like Somalians next year

insanelysane's picture


We are happy that the "wealth affect" is making you feel good.  At some point the pain you are going to feel is going to be 100x than if you just took the initial pain without all of the financial shenanigans.


- The rest of us

Lithophiliac's picture

Why would they become black all of a sudden?

Kobe Beef's picture

Old Japanese economic summary: 3-D. Debt, Depression, Demographics. 

+ nuclear Disaster = 4-D. Woot!

+ Doofus (leadership) = 5-D.

Japan is literally stretching the bounds of the Universe these days. Methinks the next D would be Death, but those Japanese will come up with something new, like pillows in the shape of tits or something.

Bell's 2 hearted's picture

says hoo?


and hoo says yields would have been higher w/o QE?


(in US yields have DROPPED when FR balance sheet neutral ... ie: no QE ... since recession "ended")

SmallerGovNow2's picture

In best Rocky 4 Russian accent...  I D I O T !!!

Cangaroo.TNT's picture

I would make the argument that malinvestment and speculation do not advance economies, and that low-or-no-cost capital encourages a search for yield as opposed to growth from production.  Further, higher bond yields would help savers, funds of many types and stripes, insurers, and encourage greater due diligence on the part of money managers, investors, entrepreneurs, etc.  


Cliffs Notes version:

Low bond yields = Beanie Babies

High bond yields = Klein Tools

aVileRat's picture

Bullshit. Pull a periodical or market chart if that's all your housetrained to present that proves that point you dumb fuck.

Higher bond yields do 1 thing; take cash flows from capital investment towards non-development activities such as papering over pensions and letting Baby Boomers live large for doing passive indexing at 4%/year trailer fees.

If higher bond yields were so great, please explain, if you can how the S&L fiasco started when Volker jacked the rate to 9%. Point to one period in economic history where raising rates during economic weakness led to capital formation or hiring improvements.Do not say 1988, and if you do say the "junk bond run" I want you to explain to everyone what prefaced that in 1987 and 1984.


Cliff notes for the weak hands:

You only raise rates under 1 scenario (and only 1)

- Inflation is stripping the productive rate of growth (inflation adjusted). If not, it only adds volatility to the economy, which benifits banks and traders, complicating the Main Street capital formation and planning activities. Pick a period of time where the most growth happened, and you find a "put" or certainty backstop.

80% of the lack of spending or capex in Mittleland and Balkan economies right now is attributed to the ECB being unable to do shit, which is reflexing back in on hiring and middle-market industrial purchasing orders (which is what is killing the GDP EU prints since July, not Russian exports).


Cangaroo.TNT's picture

OK.  Set them to zero and let Utopia ensue.  Oops.  How about letting markets set intrest rates instead of trying to manage them by committee?  Your entire thesis is based on a central bank or committee dictating rates as if they know what the cost of money should be.  That's about 30+ years of deficit spending and the Fed massaging rates lower to "manage" the economy and goose economic output.  That's not what I would consider a reasonable benchmark for comparison.  

My company underwent an expansion in the 80's that was financed at interest rates >15%.  It was paid off, and paid off early.  The money went to increased production capacity, not financial engineering.  Again, the debt was paid off, not rolled over continuously into lower lower interest rate loans as rates only went down from there.  So higher rates may limit investment in non-productive assets or those that do not provide a sufficient return, but they do not end all economic growth in all industries.

deeply indebted's picture

So...screw the long term, and our children can just go to hell, because "it could have been worse in the short term!"??? Fuck you!

jarana's picture

To Capitalist:

Who is the economy?

Higher bond yields would have helped me. I'm a saver, not a debtor.

Who are you to impose me the price of my labour earned money?

Does your wisdom need to be imposed to make effect?

venturen's picture

there would be more dead bankers. Worse for who?

BrosephStiglitz's picture

@Capitalist.  You are the same type of person that I was working with during my analysis of Abenomics in June 2012. I was the one person on a four man team who was unhappy with the official line of: "Japan is in a liquidity trap and Abenomics is teh awesomest policy". Please sir, put down your neo-Keynesian macroeconomic models and look outside.

The inflation that Abenomics reaped upon the Japanese households:
1. Failed to inspire confidence (third arrow.)
2. Destroyed purchasing power further.

And for what?  For the sake of the government to offset interest payments a little longer?

Dear Keynesians.  I said it in 2012.  I will say it again.  The Japanese government is toast.  Write off the debt.  Restructure the economy.  Rebuild.

That is what will truly inspire confidence in the people.
Yes.  It is a destructive process.
No. I am not a sadist.

But shit or get off the pot.  It's going that way one way or another.  It has been going that way for 2 decades: a slow motion trainwreck, a death by 100 cuts.  Why waste any more time for you, or your citizens?

The Blank Stare's picture

I agree. Probably the only country that could do it and maintain social order.

eXMachina's picture

The keynesian is strong in this one. I know a good exorcist that can help you with your condition, his name is trade deficit!

Bangin7GramRocks's picture

If there was any honesty left in the world, they would admit that the triple dip recession was the good news for Japan.

knukles's picture

Leave it to a panicky politician to destroy a beautiful olde Packard. 
Uncaring self-centered bastards

Say, I wonder if the Japanese and Chinese have stopped flights from West Africa? 
Have any of the Hadjis reported in sick, yet?

williambanzai7's picture

None in HK. But I would steer way clear of the vicinity of Chung King Mansion.

There is no way of knowing what is going on in China except that they probably don't have that many travelers coming from West Africa.

KnuckleDragger-X's picture

More Quanitative Enema's for everyone...

ziggy59's picture

Third times a charm, no?
Definition of insanity comes to mind...

pods's picture

Japan:  Like bouncing a jig off the bottom.


jubber's picture

So surely everybody sells the fuck out of the Yen now?

Bell's 2 hearted's picture

Abe had 3 arrows?


hope he saved one for himself


else, he needs to leap out window

i_call_you_my_base's picture

"else, he needs to leap out window"

Why? There are no reprocussions for failure in the modern era. Give him a participation trophy and call it a day. $50K speaking engagements for Abe for life.

max2205's picture

Will they televise his Hari Kari or will it just be on YouTube? 

Bell's 2 hearted's picture

"Which means Japan is now in its third recession since Lehman, and fourth since 2008."


QE/ZIRP works so well ...


i recall back in the 90s when Larry Summers was assistant sec of Treas ... derided japan for not dealing with zombie banks and opting for QE/ZIRP


of course, when shoe on OUR foot ... good ole larry opts for keeping zombies on life support via QE/ZIRP



knukles's picture

Larry is just like the Krugster.  Roots for the team with the cash and power at the moment.

youngman's picture

Failure is such a big thing in Japan....they just cant let it happen....they lose face as they say.....and this is what they got...just a long long time of treading water....but they keep getting older and older....and noone is taking their place.....a dying country....sad to watch

bbq on whitehouse lawn's picture

Its much worse than that. Japan is dragging the world down with them. All currencys are now locked in a death grip with each other. Unable to breath for fear of rocking the boat. Currencies are ment to swing and now they hardly move. Japan is the biggest reason why.
Japan has to be cut loose and pushed into the abyss or we will all join them. Im not sure why China lets the yen have purchasing power in China, or why anyone else would give the yen the power to buy up the world.

buzzsaw99's picture

they entered their triple dip in 2001

wmbz's picture

What our genius fed should do is follow Japans leed. Who could argue with it's sucess? Well perhaps if they would just print and pump more.

No wait, how about a hellicopter drop?

youngman's picture

They will...with Obamacare costing billions more in the future....and companies leaving the country to avoid taxes....they will....and the new war on ISIS...or whatever the enemy of the day is......and now new federal regulations coming for Ebola screenings....all this will add to our deficits...and the printing will continue....higher and higher we go....

tommylicious's picture

What do Freak Nasty have to say about all these "dips"?  https://www.youtube.com/watch?v=dZPQdZLyHYE


Yen Cross's picture

  If I were Abe I'd stay away from "Pufferfish Sushi" (FUGU) for awhile.

  He's likely to find himself "zombified" hanging from a long steamed kelp rope at the Fukushima fuel/containment pool #4 if he doesn't.

Spungo's picture

Keep calm, hyperinflate moar!

gatorengineer's picture

cant have hyperinflation with no demand

bluskyes's picture

demand will be triggered, once people see rapid erosion of purchasing power - like rice price doubling overnight.

insanelysane's picture

I'm sure the tax increases imposed by Japan would have fixed everything, it's just that they weren't high enough.

Kobe Beef's picture

That and they haven't borrowed enough money to build infrastructure for empty villages, office buildings for vacant leases, and residential towers for a shrinking population. 

short screwed's picture

At what point do you call it a depression? After a quadruple dip recession?

bid the soldiers shoot's picture



Why would you ever call it a depresson?

Where's the benefit in that?

Please explain.

Mitch Comestein's picture