201710.24 4

Japan Is Booming, Except It’s Not

Japan is hot, really hot. Stocks are up to level not seen since 1996 (Nikkei 225). Prime Minister Shinzo Abe called snap elections in Parliament to secure a supermajority and it worked. Things seem to be sparkling all over the place, with the arrow pointing up: “Hopes for a global economic recovery and US shares’…

201608.18
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Maybe Economists Should Just Throw Darts Rather Than Keep Searching For The Magic Number

One of the primary points of emphasis with regard to Japan’s QQE was the yen itself. Pushing the value down, even by misconceptions about what central banks do, was supposed to simultaneously increase inflation pressures via the currency translation while also stimulating the export sector to a sufficient degree that Japan Inc. would be reborn…

201608.02
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It Was All A Dream

Last Friday the Statistics Bureau of the Japanese Ministry of Internal Affairs and Communication reported some more bad news for Prime Minister Abe and really Bank of Japan chief Kuroda. Month-over-month, the consumer price index was down again, leaving it 0.48% less in June 2016 than June 2015. This was the third consecutive month of…

201607.11
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Magic Number Bias

As an outsider, it is difficult to gain the pulse of Japanese politics. Viewing it all only from an economic or financial perspective is immediately too narrow. There is far more than just Abenomics at stake, though Prime Minister Abe used the crutch of Abenomics’ failure so far as somehow a benefit. There are other…

201607.06
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End All The Myths; They’re Almost Done Anyway

Nominal disposable income in Japan fell 4.4% year-over-year in May 2016. In what can only be a sign of the times being far too familiar in Japanese, real disposable income was thus slightly better at “only” -3.9%. For all the hundreds of trillions in new Japanese bank reserves provided by so many QE’s I have…

201605.31
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It’s Not Stupidity, It Is Apathy (For Now)

Ten days ago, it was reported that the Bank of Japan for the first time set aside reserves against expected losses should its massive portfolio of JGB’s finally move toward QQE success. The main part of all this “stimulus” has been the accumulation of primarily government bonds at massive premiums. If it were ever to…

201605.23
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The Mirage of Irregular GDP And How Economists Get Away With It

Last week, Japan reported GDP growth of 1.7% in Q1. That was much better than expected and led to all the usual extrapolations about how bright the future is in Japan now that QQE is working (and NIRP since that was started during the quarter). In this devalued economic world of central banking for the…

201602.16 0

The Nearing End of ‘Stimulus’

As China, Japan is the definition of insanity. GDP fell 1.4% in Q4 2015, marking the fifth contraction out of the past nine quarters and yet the word “stimulus” remains attached to QQE, the Bank of Japan and Abenomics in general. At this point, how much more time and sample size is necessary before calling…

201602.08
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Why Japan Went NIRP: No More Doubts About QQE

When real household spending fell by 4.6% in April 2014 it was cause for concern. That was the first month after the tax hike hit and the decline in spending was much larger than anticipated (by economists, at least). Despite the heavy toll, Bank of Japan officials remained (outwardly) wholly unconcerned over what was believed…

201512.29
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Japan’s QQE Continues To Destroy Japan’s Economy; Economists Argue Whether Or Not That Might Be Recession

Japan has a history of revising its economic figures all over the place. The QQE era seems to have made GDP accounting something of an art form rather than the quantitatively determined “science” of how it is presented. For example, last December the Japan Times ran a story on December 2, 2014, under the headline…