The Endgame: Japan Inc. Plays By Its Own Rules - News and Current Events | futures io social day trading
futures io futures trading


The Endgame: Japan Inc. Plays By Its Own Rules
Updated: Views / Replies:676 / 0
Created: by Quick Summary Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

The Endgame: Japan Inc. Plays By Its Own Rules

  #1 (permalink)
Quick Summary
The Endgame: Japan Inc. Plays By Its Own Rules

Wolf Richter www.testosteronepit.com

The plunging approval ratings of Japanese Prime Minister Yoshihiko Noda continue the tradition of all Japanese prime ministers since Junichiro Koizumi—there were six of them in five years. Public approval is high at the start when voters hope that things will change. As reality sets in, approval skitters down a steep slope that lasts 8 to 15 months. When it drops into the low twenties, the prime minister is kicked out, and a new guy is installed.

Days after being appointed on September 2, Noda reveled in a public approval rating of 63%. Early October, it plunged to 55%. Early November, it plunged to 47%.

The November poll was taken after he’d announced legislation that would raise the national consumption tax from 5% to 10%. Government deficits have spiraled out of control. Gross national debt is 230% of GDP (it makes Greece’s 160% look virtuous). Japanese Government Bonds, rated AA-, are facing further downgrades. Something needs to be done. And Noda asked consumers to do it.

The latest poll, conducted in early December, wasn’t kind either. The ongoing discussion about the consumption tax dragged down his approval ratings to 44.6%. Other issues weigh as well, such as frustration with the disaster reconstruction efforts, response to nuclear contamination issues, and an increasing public distrust in the political parties. The prime-ministerial unpopularity contest continues:

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Noda’s disapproval rating jumped by 6 points to 40.3%. More than half of those surveyed want a general election before the new consumption tax is enacted. Only 25.4% supported his plan to hold an election after enacting the legislation.

Even voices within Noda’s Democratic Party of Japan (DPJ), have expressed concern about the tax increase at a time when the economy is fragile. Ironically, to keep the economy afloat, the government just advanced another “supplemental budget” (stimulus package), the fourth this year, unprecedented since World War II. And the tax increase is under attack from the Liberal Democratic Party (LDP) which ruled Japan almost continuously from 1955 until 2009.

After Japan’s bubble burst in 1989, the government resorted to deficit spending to prop up the economy, which accomplished two things: sporadic upticks in GDP and an explosion in government debt. At 230% of GDP, and still growing, that debt can no longer be serviced by a workforce that is shrinking—a result of two demographic shifts: decades of low birth rates and the retirement of baby-boomers.

And cracks have appeared in two other pillars that support the debt: the savings rate has sunk to American levels, and the trade surplus has been replaced by deficits at regular intervals (five months so far this year).

So, is Japan at the brink of an epic collapse? Are JGB yields going to spike? Is it time, finally, after 20 years of false hope, to short JGBs?

Funding hasn’t been a problem: due to Japan’s institutional setup and insular psychology, it has been able to sell 95% of its JGBs within Japan. Individuals directly or indirectly hold over 50%. Government-owned or controlled institutions hold over 40%. Among them: the Government Pension Investment Fund, one of the largest pension funds in the world; the government-owned Post Bank, the largest deposit holder in the world; financial institutions the government can lean on; and the Bank of Japan.

There is essentially no free market for Japanese debt, and foreigners hold only 5%. Whenever the BoJ, the Ministry of Finance, and politicians say, "Buy these crappy bonds at these ridiculously low yields," buyers fall in line. Example: the planned sale of reconstruction bonds. Those who buy certain amounts and hold them for specified periods get a gold trinket as reward, rather than yield. And it’ll work.

It’s easy to underestimate just how powerful Japan Inc. is, and how powerless elected officials are. Prime ministers are replaced when the public gets frustrated. But the bureaucrats and corporate interests that control a big portion of the economy remain in place.

It’s also easy to underestimate how cohesive and homogeneous Japanese society is, and how willing the people are to sacrifice for a common good, namely Japan, as long as Japan takes care of them in return. So far, that pact has worked. While Japan’s debt will blow up eventually, it’s not clear when, and it’s not clear how. The Japanese might very well make a collective decision to deal with it in a manner that seems incomprehensible to the rest of the world. And anyone who bets against Japan Inc. and its debt should keep that in mind.

But life goes on. 20 supercars were speeding down the Chugoku Expressway, trying to get to a supercar gathering in Hiroshima. At a left-hand bend, the lead Ferrari changed lanes at 90 to 100 mph though the speed limit was 50 mph. The highway was wet. And the rest was very expensive.... Superlative Supercar Pileup (with video).

Wolf Richter www.testosteronepit.com



More on ZeroHedge...

Reply to share your thoughts on this current event.


Reply



futures io > > > > The Endgame: Japan Inc. Plays By Its Own Rules

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Linda Bradford Raschke: Reading The Tape

Elite only

Adam Grimes: TBA

Elite only

NinjaTrader: TBA

January

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
union rules kbit Jokes 0 August 21st, 2011 01:47 PM
The Beginning of the Endgame kbit News and Current Events 1 August 13th, 2011 07:34 PM
Meredith Whitney to Goldman: What's the Endgame? Quick Summary News and Current Events 0 April 19th, 2011 07:00 PM
HOT Plays Median Renko+VMA+Weekly Fibonacci COTtrader Trading Journals 4 April 23rd, 2010 09:30 PM
Forum rules Poocher Off-Topic 14 November 15th, 2009 10:57 PM


All times are GMT -4. The time now is 02:23 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-12 in 0.06 seconds with 19 queries on phoenix via your IP 54.163.209.109