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The Dummy's Guide To Tomorrow's Japanese Elections
The Japanese economy may well be getting crushed under the weight of Abenomics (courtesy of an unprecedented in history quadruple-dip recession and a record number of Japanese corporate bankruptcies due to the plunging Yen), but as we wrote previously, Abe has effectively hijacked the nation to his (and Paul Krugman's) stock-market levitating policies and has given Japan a simple choice: either you let us see this disastrous experiment in trickle-down monetarism to its tragic end, or all your pensions are toast. Not much of a choice for a population which has more retirees than any developed nation. And it's not like Japan has much a chance anyway.
Which is why the outcome of tomorrow's vote for Abenomics is completely irrelevant, and which the local press, now thoroughly complicit with Abe's agenda in the aftermath of the passage of Japan's "secrecy law" a few days ago - which threatens 10 years of prison time for anyone who dares to say pretty much anything that does not conform with the government propaganda: in other words, pure end-state fascism - says will "unquestionably" be won by Abe in an absolute majority.
Case in point: moments ago Japan Today reported that "Heavy snow hit large swaths of Japan on Saturday, the eve of the general election, fueling speculation the ruling coalition is on course to an even easier victory thanks to low voter turnout." So the narrative becomes its own conclusion, thanks to the weather. Not even Diebold's presence will be necessary to cement the fate of Japan? Maybe the farce can be complete when Abe wins with more than 100% of the vote.
More:
It was already snowing heavily in large areas of the country along the coast of the Sea of Japan on Saturday, though Tokyo remained clear and sunny.
The Meteorological Agency warned of snowfall of up to 80 cm in central and northern regions by Sunday morning, when polls open.
The poor conditions could put off already unenthusiastic voters and push turnout to a record low for the House of Representatives election, which was called two years ahead of schedule.
Early opinion polls have shown Prime Minister Shinzo Abe’s Liberal Democratic Party-Komeito ruling coalition is likely to secure more than 300 of the 475 contested seats, giving them the supermajority it needs in the powerful Lower House to force through legislation.
The ruling camp’s predicted victory is largely thanks to an unprepared and underwhelming opposition, political pundits have said. A recent survey found just two-thirds of voters expressed any interest in the election, down from 80 percent before the December 2012 general election that saw Abe seize power.
“Abe’s expected victory is the result of the self-destruction of the opposition,” Shinichi Nishikawa, a professor of politics at Meiji University in Tokyo, said in an interview earlier in the week. “For many voters, there is no alternative but the LDP.”
Abe has billed Sunday’s election as a referendum on his pro-spending growth policy.
Good, because if it was a referendum for his treatment of the economy, as shown below..
or corporate viability as seen in this chart:
It would be an absolute disaster. In fact, if driven by simple popularity polls, however skewed, Abe would have a tough time. As the following approval/disapproval poll by the Nikkei shows, Abe's cabinet is about to have a greater disapproval rating for the first time in its history, despite the near doubling of the Nikkei in the interim period. Perhaps the collapse of the Yen's purchasing power has something to do with it?
In other words, tomorrow's (re)election of Abe will be anything but a referendum on Abe's policies, even if Abe is still expected to claim a resounding win. Still, at least on paper, there are three possible outcomes: they are shown in the chart below.
However, due to the inevitability of the win, the election is officially nothing more than more dramatic theater with a predetermined outcome: an outcome that will continue until the entire Japanese state is thorugouhly gutted. Ironically that may happen just as the Nikkei hits all time highs.
Still, for all those curious about the "official narrative" behind the election and its outcome, here is Goldman's Allison Nathan interviewing two other Goldman strategists, Naohiko Baba, Chief Japan Economist, and Kathy Matsui, Head of Japan Portfolio Strategy, who break down everything a dummy (or perhaps muppet) needs to know about tomorrow's guaranteed Abe triumph.
Why did Prime Minister Abe call an election now?
Naohiko Baba: The decision to dissolve the lower house of parliament (the Diet) and call snap elections was a very politically-motivated one, in my view. Abe had been searching for the best timing to hold elections before his current term ends in December 2016 in order to extend his term for as long as possible. He likely judged that now is the best timing for an election for several reasons.
First, it gives him a chance to reset politically and potentially leave behind recent unfavorable developments including the forced resignation of two female ministers on the back of scandals, and the administration’s failure to advance a North Korean investigation into the abductions of Japanese citizens in the 1970s and 1980s, a major source of tension between the two countries. (Japan had agreed in July to lift some sanctions on North Korea if Pyongyang reopened the investigation.)
Second, Abe’s support rating may well continue to decline as his cabinet will be expected to start tackling unpopular issues in the next Diet session beginning in January, including national security-related legislation that involves revising the interpretation of the collective self-defense clause in the constitution, the restart of nuclear reactors shut since the 2011 Fukushima disaster, and completion of the Trans-Pacific Partnership free-trade agreement.
Third, he may want to take advantage of the positive momentum generated by his popular decision to postpone the second consumption tax hike to April 2017 from October 2015, recent improvement in the employment numbers, and the rise in equity prices prompted by additional monetary easing by the BOJ and the GPIF announcement of new, higher, equity allocation targets for Japan’s pensions.
Finally, holding elections before other parties are ready to mount a strong opposition should give him the best chance of securing an absolute stable majority of seats.
Kathy Matsui: It was not an obvious decision and few had anticipated it. Typically prime ministers only call elections if they believe there is something to gain by doing so. In Abe’s case, the early elections could potentially help (a) lift his flagging support rate and (b) consolidate his support base in order to carry out his reform agenda. While this was not a riskless decision, Abe presumably felt this was an opportune moment to leverage the decision to postpone the second consumption tax hike and that a victory would give the LDP four more years to implement various initiatives.
If Abe secures his mandate as is widely believed, will his focus be on Abenomics or political issues?
Naohiko Baba: Hopefully he will push forward on both fronts – the economic and the political. But my view is that he will use the mandate and the recent relative successes of his economic agenda primarily to push forward his political agenda, such as the controversial national security issues and the nuclear restarts.
Kathy Matsui: He will need to focus on the former to achieve the latter. It is well understood that there is a growing need for Japan to participate in keeping democracy safe in the Asia-Pacific region (see our New Security Framework”). But Japan will not be able to make any contributions in this arena if its economy is stuck in recession. So while the aim will be to move forward on both the economic and security agendas, in terms of priorities, I believe that Abe knows he needs to get the economy growing first to make progress on security issues.
What many observers overlook with respect to Abenomics is that the key to sustainable economic growth is a healthier and more competitive corporate sector. The government has created an environment for firms to become more profitable: it has removed the noose of a strong yen and is cutting the corporate tax rate. As a result, companies are generating record earnings, but the challenge is how to encourage companies to deploy their cash into the real economy via higher wages, capex, etc. This is a key reason behind the government’s corporate governance and GPIF-related reforms, as it knows that a robust corporate Japan is the key to sustainable economic growth.
Would such a mandate be a good thing or a bad thing for progress on structural reforms?
Naohiko Baba: I am not sure how determined Abe and his cabinet are on the structural reform front. In his campaign pledge, he has included structural reform plans such as easing regulations in areas of agriculture, labor markets, medicine, energy, and proceeding with TPP negotiations. But that is it. My impression is that these plans are vague. So generally speaking I have not been optimistic about structural reforms and have been cautious on the economic front. And these elections are not changing my stance.
Kathy Matsui: If Abe and the LDP emerge from the election with a stronger mandate, it will be harder for the opposition both inside and outside of his party to push back on his structural reform priorities. These priorities include an overhaul of the tax system, not just corporate tax cuts, but broadening the tax base by introducing the taxpayer ID system and forcing companies that are essentially evading the system – 70% of Japanese companies don’t pay any taxes – to participate in the system by levying on the basis of revenues and not profitability; moving forward with the Trans-Pacific Partnership free trade negotiations; finalizing a Womenomics package that will force Japanese companies to disclose gender statistics, set diversity targets, and compile action plans to reach those targets; and establishing special economic zones, among other initiatives.
There is naturally a risk that Abe disappoints the market in terms of his reform agenda. But he and his cabinet know that if they delay reforms, the economic consequences are fairly clear. During the Koizumi era (2001-2006), elections were suddenly called ostensibly to secure a mandate for postal reform, but other than the beginning stages of postal privatization and forcing banks to dispose of their nonperforming loans, it quickly became apparent that the rest of the reform agenda was relatively limited. Abe understands he needs to make real and sustainable progress.
What happens politically if the LDP loses more seats than it anticipates?
Naohiko Baba: Such a loss would be very difficult for Abe personally because presidential elections within the LDP will be held in September 2015 and the more seats the LDP loses in the upcoming election, the more his chances for re-election dim. Of course, if the LDP and Komeito fail to secure a simple majority, the political ramifications would be much greater both for Abe and for the ruling coalition’s ability to push through reforms given still-powerful vested interests.
Kathy Matsui: It would jeopardize Abe’s entire agenda of economic and security reforms. However, based on various polls, the likelihood of the LDP losing the majority appears extremely low at this stage.
What asset implications might there be?
Kathy Matsui: The consensus believes the ruling coalition (LDP/Komeito) will retain its majority and recent polls suggest the coalition could retain a super-majority (at least 317 of 475 seats). While part of this is due to the LDP’s own strength, another reason is the fragile and fragmented state of the opposition. We believe the equity market’s rally in recent weeks has already discounted a ruling coalition victory, and only a resounding, landslide result might elicit a positive market reaction. On the other hand, a meaningful loss of seats would naturally be negative for the stock market.
* * *
Which, in a world in which the legacy central-planning regime only has control left over manipulated stock prices and other ledger entires in some computerized database to "boost confidence" that all is well despite what pesky reality consistently suggests is not the case, explains precisely why there will be no "meaningful loss of seats" tomorrow.
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Election-winning President = Banker Bitch
2015 will be so 2014
Hitchhiker's Guide to the Galaxy was right about presidents.
What erection?
Damn woman, I told you to lick my erection, not wreck my election!
This is the dummy's version?
And I thought we were fucked up on this side of the Pacific.They make us look good
Japan Inc.
Exporting deflation since 1989.
United States, exporting inflation since 1913
Japan at least doesn't have a third of it's working age population sitting around watching TV, making babies, and scooting around Wal-Mart. If Japan can't afford its old people, we certainly can't afford ours and the FSA.
It matters not who votes but who counts the votes, OR who choses the candidates. What difference does a vote make if the electorate is given two corrupt, lobby beholden, douchebags?
Or in the case of Japan, one douchebag and ... nobody else. Even if the opposition wins EVERY seat they contest, Abe still wins.
“If voting made any difference they wouldn't let us do it.”
Mark Twain
And?
I feel so extraordinary, somethings got a hold of me, I get this feeling I'm in motion a sudden sense of liberty. I cant, cos I'm not there, I dont care if I'm here tomorrow, again and again I've taken too much, of the things I've caused you too much.....
I used to think that the day would never come, I'd see the the light in the shade of the morning sun, my morning sun is the drug that brings me near, to the child that I lost replaced by fear, I used to think that the day would never come that my life would depend on the morning sun.
Its time for a New Order folks.
For the people, of the people, by the people.
Its time for mother fucking war.
Nothing, abso-fucking-lutley nothing.
Changes otherwise.....
A New Order, not a new world order, on our terms...
;-)
LOL Bravo I missed your post while I was posting + 1000
;-)
Sometimes I come here just for the humor Voting now thats some funny shit ...nice saturday clickbait humor is always fun
This isn't ever gonna end till we form our own civil army and take it back
now wheres those militia assholes who always give me a hard time ...oh thats right still drinking beer pretending to be a force to rekon with the true defenders of the faith ...arm chair generals spouting about freedumb ....
I'm just waiting for hardline action When it kicks in I'll be right there on the front lines.. so who's gonna kick it off????
signed The Army of One
"waiting for a leader to show up"
-- the story of the downfall of societies
no not a leader just a mass action can always find a dumbass to be the target aka leader afterwards
If you're volunteering then we're on our way ;)
Nope. Psychopaths are drawn to power like a magnet. Left unchecked, they'll always lie, cheat, murder and otherwise push their way to the front of the line.
Political Ponerology: A Science on the Nature of Evil Adjusted for Political Purposes
"If the many managerial positions are assumed by individuals deprived of sufficient abilities to feel and understand the majority of other people, and who also exhibit deficiencies in technical imagination and practical skills - (faculties indispensable for governing economic and political matters) - this then results in an exceptionally serious crisis in all areas, both within the country in question and with regard to international relations. Within, the situation becomes unbearable even for those citizens who were able to feather their nest into a relatively comfortable modus vivendi. Outside, other societies start to feel the pathological quality of the phenomenon quite distinctly. Such a state of affairs cannot last long. One must then be prepared for ever more rapid changes, and also behave with great circumspection." (2nd. ed., p. 140)
Well Japan headed to collapse: the sole difference Sunday will be if they collapse faster or a little slower.
Notice that Kathy Matsui (A Goldman Sachs bug) is one who created the womenomics (feminism on steroid) for Abe, pure gender/affirmative action politics in Japan, yes that same kind of shit that we have in the West (and the last thing that Japan need).
Look like the grass-eater movement will explode the coming next year.
And they want to restore Japanese economy with that shit ? OMFG !
Bearish Japan.
United States,
Exporting election rigging scheme since 2010. (It might be earlier than that.)
We rigged some folks.
"they collapse faster or a little slower."
Decisions, decisions. Agonizing pain or get over with it.
Same economic model for the US.
Seems like the banksters want to force it on the US faster with $300 trillion in derivatives.
" either you let us see this disastrous experiment in trickle-down monetarism to its tragic end, or all your pensions are toast."
I don't think it is an either/or outcome. The pensions are toast. Either the pension is cut or the value of the money is cut.
Nice self-contradiction, bot.
screw japan our vassal state germany is still holding the EU together still waiting to see that do a face plant and not soon enuf
United States of America owns ur Jap ass.
What comes first: The "selection," or the "election?"
An American, not US subject.
Everything in place for co-ordinated fascism. Please...do not worry.
Will Abe's victory be the excuse to ramp the Nikkei and crush gold? Gold needs to play catch down with the S&P, this would be a perfect excuse.
When has an excuse ever been needed to bitch-slap gold?
Headlines from history past and future:
~1860s: Abe fights huge civil war.
~2020s: Abe fights huge civil war.
I thought history was only supposed to rhyme.
What's dangerous is Abe with a supermajority... he can change the constitution and the events that will happen might lead to all out war with China...
It's the Battle of the Worldviews:
The LDP (Liberal Democrats - Abe's Party) and the Komei (Soka Studies Cult Run) Party Coalition win the Incontestable Majority again, then they're going to make JPN more of a Vassal to the USA with its QE/Abenomics, Collective Self Defense (i.e., going to War with the USA - not because JPN is being invaded; but just because their Master is engaged in a War someplace).
Something the Peacenik and Conservative Opposition Factions - and the Independents don't want to happen.
Regrettably, the LDP are one of the few Parties that want to keep using Nuke Power. The Peaceniks have gone Treehugger; and have no clue that they're going to be dependent on ME/USA Oil and Gas for decades. I want to know which fracking Hippie has been selling the Peaceniks the line about renewables w/o any Capital Outlay Plans. Amateur Hour by the same cowards who won't lift a finger to defend their land.
They're selling Bonds to Selloff the Yen AND to pay off their Soverign Debt Interest...WTF...