tubki

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    • Sat Jul 26th 02:03 AM | Rating: 0 0
      Commented on:
      Japan: Recession-Bound As Exports Slow?
      I think they have a few things working against them.

      - they dont actually have anything raw material of their own, everything they build (value added service) is based on their ability to manage long term price contracts with the raw material suppliers. These supplier are not exactly in the mood these days to be swayed by the traditional carrot of 10 year contracts, fixed pricing.
      - their largest exports: cars, electronics are not exactly must haves in a normal average household in the world
      - their own dependence on oil is still fairly high and despite their big trading company contracts with the oil companies they are quite likely going to face a pass through effect, where they will eventually have to pass on the cost of oil to the end user.
      - the long term we love africa because they have the capacity to be our kitchen garden will take at least 10 years to build out. Kitchen garden, untapped menrokusai resource / metal farm.... same thing ! They are all about exploitation also ...
      - On the domestic front there is very little principal protection available, standard investments like real estate, stocks, venture businesses are all basically touch-me-nots for the next few quarters.
      - carry trades that can keep some slight interest income at hand are tricky to manage and leverage can put ur principal at risk.
      - the govt credibility has taken a huge hit because now basically everyone acknowledges that there maybe no pension to be had, the medical social system is underfunded, and like everywhere else in the world politicians are politicians ...
      - The average salary has not kept up with the increases in the rest of the world in terms of wage growth ... Its actually amazing how much purchasing power has vanished in this country VS how much has build up in china and india in the same last decade.
      - And to top it all there is this sense of xenophobia for global investors which has finally hit the streets, (after doing the dinner circuit in the diplomatic circles), and there is now a general aversion by global investors to grow their japan books. There is a general alignment by all major investment books to get ready for the fire sales that will probably start soon ... Auto parts makers, machinery manufacturers, of course developers and fudosans, lots of failing restaurants / chains, etc.

      There are a lot of things going against them i am afraid and as much as i love the zero volatility living that they create for their people, this time i fear that they have backed themselves into a corner. Of course there is no doomsday type event in the making, all i`m saying is that with an aging and shrinking workforce maybe this is the start of the slide downhill.
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