Tuesday, February 10, 2009

Turning Japanese

The latest CSO Indices for Industrial Production and Turnover (pdf) are especially grim. Production volumes in the 'Modern' Sector have fallen back to levels last seen in 2006. Production volumes in the 'Traditional' Sector (predominantly Irish owned) have fallen back to levels last seen in the late 1990s ... The overall production index was down -13% year-on-year in December: turnover was down -7.7%.

It has got me worried that we might be 'turning Japanese'. Japan's industrial output also contracted sharply in December, by -10%. Moreover, listening to a podcast on the situation in Japan by Peter Day, it is striking how strong the parallels are between Japan's property bubble-fuelled boom and bust in the late 1980s and our own in just the past few years. And despite frantic efforts by Japan to reflate, inflate and do-just-about-anything to get their economy going again, it simply hasn't worked. Here's Bill Bonner with an update:

Public spending was so aggressive, it boosted Japan’s government debt to 180% of GDP – more than two times the current U.S. level. But did all that cement buy Japan out of its slump?

You be the judge. Housing prices in Japan are now back down to where they were in 1975 – nearly 90% below the late-’80s peak. And stocks? The Nikkei index is back down to where it was a quarter century ago. Stocks sell for half their book value – and they’re still considered too expensive for beaten-down, hyper-fearful Japanese investors. The downturn began in 1990. Over the following 19 years, it did more property damage than the Great Tokyo Fire of ’23 and the Enola Gay combined, wiping out wealth equal to three times the country’s GDP. This was despite interest rates at zero…and a heroic effort at Keynesian stimulation

The average Irish new house price in 1975 was €13,254, by the way. No, I didn't have a nice feeling in my stomach after reading that either ...

Maybe this will cheer you up:

3 comments:

  1. Indeed. Watch out for some of this:

    http://www.adbusters.org/magazine/81/big_in_japan.html

    too.

    ReplyDelete
  2. Wasn't the term 'turning Japanese' a reference to the latter stages of a bout of self-abuse (or self-love if you are more enlightened - i.e. a wank)......Still probably an apt reference to us with this 'non-economic' meaning as well!

    ReplyDelete
  3. WE'RE TURNING JAPANESE
    (Turning Japanese, The Vapors)
    WilliamBanzai7

    Sing along link: http://video.google.com/videosearch?q=turning+japanese&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&ei=I1SnSeeUCMPDkAX694TJDQ&sa=X&oi=video_result_group&resnum=4&ct=title#

    We've got a Century's worth of horrendous economic news
    You wrote "We love you" We wrote back "we too"
    We sit here staring at Bloombergs, there's nothing else to do
    Oh it's in color the DOW keeps going down
    Our eyes are glazed And our deficit is flying in the clouds
    Now we can kiss our own depressed Asset Bubble goodbye when there's no one else around

    We've got a picture, We've got your picture
    Like a million years of stagnant economic hell
    We want a doctor to take your picture
    So we can look at your Lost Decade from inside as well
    You've got us turning up and turning down
    And turning in and turning 'round

    We're turning Japanese
    I think We're turning Japanese
    I really think so
    Turning Japanese
    I think We're turning Japanese
    I really think so
    We're turning Japanese
    I think We're turning Japanese
    I really think so
    Turning Japanese
    I think We're turning Japanese
    I really think so

    No loans, no bonus, no jobs, no women
    No fun, no sun, no good news, no wonder it's dark
    Everyone around us is in layoff danger
    Investors all avoid us like a cyclone ranger

    That's why We're turning Japanese
    I think We're turning Japanese
    I really think so
    Turning Japanese
    I think We're turning Japanese
    I really think so
    We're turning Japanese
    I think e're turning Japanese
    I really think so
    Turning Japanese
    I think We're turning Japanese
    I really think so

    ReplyDelete

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