Posts Tagged ‘discrimination’

Multi-Drug-Resistant-Tuberculosis-Stricken South African Teen Commits Suicide After Repeat Abuse from Nurse

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Teen Hangs Herself After Argument With Nurse At TB Clinic

Article by Sipokazi Maposa

Provincial health authorities say they are investigating allegations that a nursing sister in Mbekweni, Paarl, refused treatment to a teenager with multidrug-resistant tuberculosis because she had missed her clinic appointment by three days.

The family of 15-year-old Joy Skrish allege that the teenager committed suicide last week following a confrontation with the Polar Park Clinic nurse.

Joy was a Grade 9 pupil at Hlumelo Junior Secondary School.

According to the family, when the teenager arrived at the clinic on Monday last week, the nurse got so angry with her that she threw her sputum into the rubbish bin, then threatened to disclose the girl’s MDR-TB status to her school.

Joy had been supposed to deliver the sputum the previous Friday.

The family said the nurse also refused to give the girl her daily tablets.

Jo-Anne Otto, spokeswoman for the Department of Health in the Winelands region, denied that Skrish was refused treatment. She confirmed that the 15-year-old was an MDR patient.

She said the nurse was still working at the clinic and had not been suspended.

“The department and its personnel would not refuse to provide health care, treatment or medication to any member of the public requiring it.

“The allegations against the nurse are seen in a very serious light, however. She has not been suspended, but the matter is being investigated,” Otto said, offering the department’s condolences to the family.

Mbekweni police spokesman Captain Flip Linnert said police were investigating a case of suicide.

Meanwhile, the alleged incident has drawn heavy criticism from the Treatment Action Campaign (TAC).

TAC Western Cape co-ordinator Fredaline Booysen described the incident as “unfortunate”, especially given the fact that it was happening during TB Month, designed to highlight the plight of patients battling the disease.

“The healthworkers are suppose to work together with TB patients and be there for them. Yet you’ve got healthworkers who have such a bad attitude that they drive their patients into situations where they end up killing themselves. That is so sad and unacceptable,” she said.

Lulama Skrish, Joy’s mother, said her daughter was so upset with the treatment she received from the nurse that she returned home in tears, and vowed never to return to the clinic.

Then, three days later, Skrish said she got a call from the nurse asking where her daughter was, and why she was no longer collecting her treatment.

“I then asked her why she threw Joy’s sputum in the bin and refused her treatment? She told me she did so because she felt like it, and that it was because Joy had brought her sputum very late.

“She then told me that she would go to Joy’s school and blacklist her from going to the school again by disclosing to everyone that she was an MDR patient, and she must not be allowed to be with other pupils as she would give them TB. She also told me that she would book Joy in a TB hospital very far away from us where we couldn’t have access to her,” she said.

Skrish then convinced her daughter to return to the clinic with a new sputum sample. But, again the girl returned home in tears.

“The only thing she told me this time was that she would rather not go back to school ever again than be treated badly by that nurse.

“She then went into one of the bedrooms and slammed the door behind her.”

Her mother went to check on her later, only to find Joy dead. She had hanged herself with a rope in the bathroom. – Source.

This tragedy did not happen in a small bubble of evil, but in the context of South Africa’s extreme moral degradation due to the great growth of the atheist population there and large continual presense of Catholicism. Rapes of both males and females are wide-spread in South Africa, and women are gang-raped by some males to form a closer friendship between themselves.,2933,233447,00.html
New Zealand atheist caught lying about Christians by a South African atheist (read the comments below the linked article)

South Africa is at the gates of Hell.

“mark this: There will be terrible times in the last days.
People will be lovers of themselves, lovers of money, boastful,
proud, abusive, disobedient to their parents, ungrateful, unholy,
without love, unforgiving, slanderous, without self-control, brutal,
not lovers of the good, treacherous, rash, conceited, lovers of pleasure
rather than lovers of God”

2 Timothy 3:1-5

Japan’s Economy from 1982-2010 With Links to Statistical Data

February 19, 2010 Leave a comment

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from (copied on 2/19/2010):

Trade Relations Between U.S. and Japan

In a conservative estimate it has been observed that, trade between these two countries account for 40% of world gross domestic product (GDP). Japan is the fourth largest import destination of U.S. and third largest export market for the U.S. exporters. – More here.

A list of Japan’s top 15 export customers, based on WTO statistics for 2005. Total Japanese exports for 2005 amounted to US$595 billion. The top 5 countries in the list account for some two-thirds of total Japanese exports.

Top 15 Countries for Japanese Exports in 2005 based on WTO statistics:

1. United States … US$135.9 billion (22.9% of total Japanese exports)
2. European Union … $87.6 billion (14.7%)
3. China … $80.1 billion (13.5%)
4. South Korea … $46.6 billion (7.8%)
5. Chinese Taipei … $43.6 billion (7.3%)
6. Hong Kong … $36 billion (6%)
7. Thailand … $22.5 billion (3.8%)
8. Singapore … $18.4 billion (3.1%)
9. Malaysia … $12.5 billion (2.1%)
10. Australia … $12.4 billion (2.1%)
11. Indonesia … $9.2 billion (1.5%)
12. Philippines … $9.1 billion (1.5%)
13. Canada … $8.8 billion (1.5%)
14. Panama … $7.4 billion (1.2%)
15. Mexico … $6.9 billion (1.2%)

Top 15 Countries Japan Imported From in 2005 from WTO statistics:

1. China … US$108.5 billion (21.1% of total Japanese imports)
2. United States … $65.3 billion (12.7%)
3. European Union … $58.6 billion (11.4%)
4. Saudi Arabia … $28.7 billion (5.6%)
5. United Arab Emirates … $25.3 billion (4.9%)
6. Australia … $24.5 billion (4.8%)
7. South Korea … $24.4 billion (4.7%)
8. Indonesia … $20.8 billion (4%)
9. Chinese Taipai … $18.1 billion (3.5%)
10. Thailand … $15.6 billion (3%)
11. Malaysia … $14.7 billion (2.8%)
12. Qatar … $10.7 billion (2.1%)
13. Iran … $10.3 billion (2%)
14. Canada … $8.9 billion (1.7%)
15. Philippines … $7.7 billion (1.5%)


In addition to raw materials for its industries, Japan’s main imports are machinery and equipment, fossil fuels, chemicals, textiles and foodstuffs (notably beef). Note that about half of Japan’s exports go to other Asian countries.

Japan imported $515 billion worth of goods from its trading partners in 2005. The 15 countries listed below were responsible for over 85% of goods imported into Japan. – More here.

Japan’s Bubble Economy (Information from 1982-1993)
by Thayer Watkins

The story of the era of the Bubble Economy in Japan is given by Christopher Wood, a journalist who has covered Japan for the about two decades. Wood, as well as other observers, traces the problem to the quasi-feudalistic institutional structure of Japan. The most powerful institution in Japan is, by a large margin, the Ministry of Finance (MOF). Wood feels the feudalistic power of the MOF has inhibited the development of true financial markets in Japan. Presently capital is allocated on the basis of who knows whom instead of economic effectiveness. The commercial success of Japanese manufacturing has led to Japanese banks of enormous wealth but without the corresponding level of financial skill and expertise. Japanese banks typically rely upon the guidance of the MOF and consequently do not exercise sufficient independent judgment and have not learned to cope with financial difficulties. Banks have lent heavily with land as collateral. No one, apparently, questioned the wisdom of this despite the aggregate property value reaching levels four to five times the aggregate property values in the U.S. Barkley Rosser noted that in 1990 the aggregate value of all land in Japan was fifty percent greater than the value of all land in the rest of the world.

In 1985 the deregulation of interest rates on deposits began. Prior to that time bank were not allowed to pay interest on deposits. The removal of this prohibition led to competition between banks for deposits and hence to interest payments. Japanese banks did not raise interest rates they charged borrowers and thus did not offset the effect of the higher costs of their funds. They made up for the drop in their profits by selling the shares of stock they owned for a long time and counted the realized capital gains as profits. But because of the obligation of cross-holding of stock among the members of a keiretsu they immediately bought back the shares at the new higher price. This meant that they were able to count the capital gains as a profit, and had to pay tax on the capital gains and yet were back again with the assets they started with. They thus experienced a net loss of cash flow on the operation. Furthermore any decline in the stock market then would mean a disguised capital loss.

The Bank of International Settlements (BIS) has rules which are critical for Japanese banks. According to BIS rules, bank capital consists of two parts. Tier-one capital is the stockholders funds and retained earnings. Tier-two capital consists of such things as loan-loss reserves and “hidden assets.” Forty five percent of unrealized capital gains on stocks can be counted as “hidden assets” and part of tier-two capital. This was a compromise of the BIS to accommodate Japanese banking. Some members of BIS did not want to allow any unrealized capital gains to be counted as part of bank capital. Although counting unrealized capital gains accommodated the Japanese banking system, it made the Japanese banks vulnerable to price fluctuations in the stock market. If the stock market goes down then the Japanese banks must scurry to raise capital to meet BIS standard of an 8 percent ratio of capital to liabilities.

The banks themselves are an important element of the stock market so a downturn in other stocks can adversely affect banks thus bringing about a further decline in stock prices. The structure smacks of a house of cards. The cross holding of stock can impede such declines but only for a limited time. Christopher Wood says, “Even after Tokyo’s 1990 stock market crash, Japanese bank shares remain the most gross example of overvaluation in world’s capital markets.” (p.26) Wood notes that most Japanese city bank stock had price-earnings ratios of about 60 in 1991. The prestigious Industrial Bank of Japan (IBJ) had a price-earnings ratio of 100 and, with a market valuation of $60 billion, was perhaps the world’s most overvalued company.

Wood remarks,

“In effect, the continuing startling overvaluation of Japanese bank stock is critical to the banks’ own financial stability. They are in effect holding themselves aloft by their own bootstraps, a precarious balancing act that is the weakness at the heart of Japan’s financial system. Should it ever fail, it would create the likelihood of a credit implosion with all the resulting decidedly unpleasant global implications.” (p.27)

During the bull market in Japanese stocks banks issued new shares which allowed them to increase their assets. Between 1987 and 1989 city banks issued 6 trillion Yen of equity and equity-related securities. But when the Tokyo stock market crashed in 1990 these banks had a hard time maintaining the BIS required 8 percent capital ratio. Only one bank, Kyowa Bank, could maintain this ratio without resort to costly junk-bond-like financing. The number of regional banks that could meet the 8 percent ratio declined from 50 in March of 1990 to 4 in September of that year.

The MOF gave permission in June of 1990 for banks to sell subordinated debt (junk bonds) and by September they had raised 2 trillion Yen. But a major part of this was from insurance companies which may have raised the funds by selling off stock. Thus the move to remedy the banks capital problem may have depressed stock prices and through its effect on the tier-two capital of the banks worsened the situation. Wood notes,

“The other buyers of the subordinated debt were the finance subsidiaries of companies in the banks’ own financial keiretsu groups. In a typically Japanese arrangement, the banks lent money to these traditional customers at cheap rates and the companies then turned around and lent the banks their own money back at a slightly higher interest rate. This sort of gimmickry is clearly contrary to the spirit of BIS, which is meant to bolster real capital strength. It also shows that the Japanese banks have not yet learned the lesson that such games, where the money goes around in circles, buy time but do not solve the basic problem of the lack of capital at a time when credit is tightening and credit risk rising.” (p.28)

During the “Bubble Economy” Japanese banks borrowed extensively in the Euro-dollar markets, 186 trillion Yen by June of 1990. Despite being the largest banks in the world these Japanese banks were having to pay a premium in their borrowing, the so-called “Japanese rate”.

From the borrowed funds Japanese banks lent extensively. They lent out 69 trillion Yen. They provided $30 to $40 billion to finance American leveraged buyouts, including $10 billion of the $25 billion LBO of RJR Nabisco. Japanese banks opened American branches which earned very low rates of return, about 2 percent on equity. They did most of their lending in the peak of the American real estate market and consequently suffered extensive losses when property values declined and loans went bad. By 1992 the Industrial Bank of Japan (IBJ) and the Long-Term Credit Bank (LTCB) each had three to four billion dollars of loans on property that was “under water;” i.e., not meeting payments.

The collapse of the Tokyo stock market collapsed the banks tier-two capital and put them under pressure to find capital. They no longer could find easy capital to borrow and had to liquidate many of their overseas holdings, often at a loss.

Japanese banks were also adversely affected by the decline of property values in Japan. In 1990 Japanese banks held about 22 percent of the mortgages in Japan. In addition, many of the loans to small businesses are backed by property and 75 percent of the banks lending is to small businesses.

There were other financial intermediaries in the property-backed loan market. The Housing Loan Corporation, a government agency, provides interest rate subsidized mortgages. Employers also sometimes provide subsidized home loans. There are also leasing companies, consumer-finance companies, and mortgage companies active in the mortgage market but these institutions are largely dependent upon the banks for their funding so they represent the indirect participation of Japanese banks in the mortgage market.

Banks had lent 90 trillion Yen to these institutions by March of 1991. Any loans by these nonbank lending institutions which go bad will end up in the portfolios of the banks. Wood asserts that property, directly or indirectly, support as much as 80 percent of the total loans of Japanese banks.

In addition to the above financial institutions there are also secondary regional banks called sogo banks and shinkin banks (the rough equivalent of U.S. credit unions). In the U.S. banks are required to keep reserves to offset possible bad loan losses. In Japan banks are not only not required to establish reserves for bad loans, they are effectively penalized for doing so. Setting aside funds to cover bad loans would reduce the tax liability of the bank and so the banks have to obtain permission from taxing authorities to create bad loan reserves. Consequently in 1991 Japanese banks had reserves of only 3 trillion Yen for total loans of 450 trillion Yen. Japanese banks tend not to report that a loan is in default because it makes the accounting profits look bad. The accounting profits therefore hide the fact that some loans have not paid interest for as long as a year. Banks pressure the borrowers to come up with 30 percent of the interest owed because this allows them to avoid reporting their loans as being bad. This practice of not admitting problems or trying to solve them using gimmickry has become a concern of the Bank of Japan, the central bank of Japan. The Bank of Japan has admonished banks to recognize the size of their problems and to start creating loan-loss reserves, but the bank seemed to have adopted a strategy, as Wood says, of “keeping their fingers crossed.” The land market in Japan is heavily influenced by tax rules. Years ago, the Japanese government established high taxes on capital gains on land to discourage speculation. For any land held less than two years after purchase the capital gain is multiplied by 150 percent and this amount added to current income in computing the sellers income tax. If land is sold two to five years after its purchase then 100 percent of the capital gain is added to income for tax purposes. Effectively this is a 90 percent tax rate on property held less than two years, a 75 percent tax rate on property held two to five years, and a 50 percent tax rate on property held more than five years. This tax system discourages people from marketing land and consequently those who need land for some project find they have to pay exorbitant prices to get someone to part with it. Very little land changes hands and then as often as not to relatives. Consequently the valuation of land is artificially inflated. This artificial valuation of land would not be of much significance if it were not for the fact that people borrow money based upon their holdings of land. Wood reports the case of a house occupied by former prime minister Kiichi Miyazawa. The house was owned by political supporters of Miyazawa. The property occupied about one sixth of an acre. Its estimated value in 1991 was 2.7 billion Yen, or roughly $22 million. This was a very high value for a residential house but it was used to borrow 13.2 billion Yen from seven banks in 1989. This was roughly $96 million. This begins to qualify for the term “astronomical.” In November of 1991 the Ministry of Construction reported that houses and apartments in metropolitan Tokyo had in the preceding year lost 37 percent of their value and plots of land in the suburb of Saitama had lost 41 percent. The bubble in property values would not have been significant except for the fact that the use of land as collateral for loans and the fact that the taxing authorities tend to use those peak prices in valuing property subject to the inheritance tax. During the “Bubble [Economy]” there was a uniquely Japanese episode of speculation in golf club memberships. At the peak the total market value of golf club memberships was about $200 billion (that is billions not millions). There is even a Nikkei Golf Club Membership Index. Life insurance companies around the world are partly involved in providing insurance against risk and partly in providing savings programs. In both activities they end up having to invest heavily in financial securities. Life insurance companies in Japan own more stock than does any other type of financial institution. In 1990 they owned 13 percent of the stock on the Tokyo stock market compared to 9 percent held by banks. At that time they reported total assets of 130 trillion Yen, or about $900 billion. But with the decline in the stock market this has fallen. Wood reports an estimate that all the capital gains of the insurance companies would be wiped out if the Nikkei falls to 12,500. At one time that was unthinkable, but with its level fallen from about 19,000 in December of 1994 to below 15,000 in June 1995 it is no longer unthinkable. Also others estimate that the average cost of stock shares held by insurance companies corresponds to a Nikkei level of 18,000 rather than 12,500. During the era of increasing stock prices the insurance companies could make use of accounting rules to report whatever profit rate they wanted because they had discretion as to how they valued the stock they held. They could value it at its cost and report no capital gains or at market value and report the full amount of the capital gains. The reported rates of return on managing their portfolios of stock could thus be quite misleading. There is a special problem for Japanese insurance companies. Japanese law requires that they pay policyholders out of income rather than capital gains. This has led to some strange financial ploys that were of dubious economic justification but served to transform capital gains into current income, such as trading stock for bonds that paid high interest but gave little payment at maturity. Japanese insurance companies were at risk in the property market also. Six percent of insurance assets were property and many of their domestic loans were backed by property. When Japanese insurance companies became involved in foreign investment they subjected themselves to considerable risk. One such risk had to do with fluctuations in exchange rates. In March of 1987 Japanese insurance companies reported currency losses of 2.24 trillion Yen or about $18 billion. Japanese insurance companies are involved in the cross-holding of bank stock. During the rising stock market it did not matter much that these shares paid little in the way of dividends, but the situation is different. For example, Dai-Ichi Life, the second largest life insurer in Japan, announced in 1991 that it would reduce its holdings of the Bank of Tokyo, the Industrial Bank of Japan, and Mitsui Taiyo Kobe Bank. Japan’s stockbrokers were prime beneficiaries of the Bubble Economy and were hard hit by its collapse. The profits of the four biggest; Nomura, Daiwa, Nikko (Mitsubishi) and Yamaichi; fell by 60 percent in 1990. Others experienced a drop of 80 percent and more. In 1991 virtually all Japanese stockbrokers except Nomura lost money. Nomura is an interesting case. It was created in 1925 in Osaka as a spinoff from the bond department of Daiwa Bank. During the Bubble Economy Nomura was not only the most profitable financial institution in Japan it was the most profitable company of any sort. One of the scandalous incidents of the Bubble Economy is the discovery that the prestigous Industrial Bank of Japan (IBJ) lent 240 billion yen to an Osaka restaurant owner, Onoue (Nui), on the basis of forged certificates of deposits. Using the funds from these loans Miss Onoue in the late 1980’s became the biggest speculator in the Tokyo stock market and the largest individual stockholder in the Industrial Bank of Japan. Miss Onoue had spent her early adulthood working as a waitress in bars and restaurants of Osaka. Later, with funds from some mysterious backer, she purchased two restaurants. She began speculating in the stock market and during her heyday as a speculator purchased as much as 120 billion yen of stock in one day. She was a major speculator in the market. She belonged to a strange Buddhist sect and would hold mysterious midnight rites in her restaurants to seek divine help for her stockmarket activities. Many stock market professionals attended these midnight rites, perhaps to find out if the secret of her success was supernatural or perhaps just to keep her business. She was known as the Dark Lady of Osaka. Although IJB was her major source of credit it was not her only source. She was charged with borrowing against 340 billion yen of forged CD’s. Onoue was alledged to have ties to the Yakuza (organized crime in Japan). She was also alledged to have ties to the Burakumin community (descendants of the untouchables of Japanese feudal society) and some of the directors of IJB were also said to have such ties.

Although the Bubble Economy ended essentially in 1990 it wasn’t until January 29, 1993 that a Japanese prime minister acknowledged that the “Bubble Economy” had collapsed. In the first three months of 1993 the price level fell by 1.1 percent, which represents a rate of deflation of almost 4.5 percent per year. By August 1993 wholesale prices were falling at an annual rate of 4.2 percent. In the second quarter of 1993 Japan’s GNP declined at an annual rate of 2 percent. The Japanese economy was in serious trouble. The bureaucracy’s attempt to deal with the problem typically involved trying to use some scheme, a quick fix, rather than correcting structural flaws. The government tried to raise prices in the stock market by ordering public sector financial institutions to buy stocks. The banking system suffered severe losses from loans used to buy property, but the bank tried to pretend these losses had not occured. Employees were paid with unsold company inventory. – More here.

Economic Devastation?
What the earthquake and tsunami might mean for Japan’s economy.

by Annie Lowrey
3/11/2011/5:23 P.M. ET

Nobody knows just how bad the damage is from the earthquake in Japan, and the current focus remains on preserving human life. Still, some investors and analysts are already starting to question how it will affect Japan’s economy.

One concern voiced in investor notes and wire stories is that the earthquake will nudge the country closer to a debt crisis. Japan is deep in the red—much deeper in the red than the United States or, really, any other developed country. Its 20-year bout of recessions has given it a massive national debt. And last quarter, despite a global return to growth, its economy actually shrank. If the Japanese government needs to issue new bonds to rebuild, the concern goes, that might further imperil its fiscal situation, raising its borrowing costs and even sparking default.

The question is whether the disaster could “push Japan over the edge” financially, Brendan Brown of Mitsubishi UFJ Securities told Bloomberg. Another analyst told CNN Money that “Japan’s economic recovery has lost momentum and a large part of the reconstruction costs will add to the government’s significant debt burden.” But it’s too early to say whether an economic crisis will follow the humanitarian one. And concerns about Japan’s ability to repay its debt due to the earthquake seem overblown.

As a general rule, earthquakes are less harmful—in terms of human life and economic damage—in rich, stable countries. Consider the case of two major earthquakes that hit in 2010: the 7.0 magnitude earthquake near Port-au-Prince, Haiti, and the 8.8 magnitude earthquake that hit Chile. In many ways the two quakes are not comparable: Haiti’s earthquake, though smaller, hit very close to a densely populated region; Chile’s, though much stronger, hit offshore and affected a less populated area. Nevertheless, the former killed 316,000. The latter killed about 500 people. Chalk that up to Chile’s wealth and stability: stricter building codes, better emergency preparedness, excellent hospitals, and functional government.

Thus, Japan should be able to recover from this earthquake as quickly as any nation could. It has the strictest building codes in the world, and its economy is huge—and the bigger the country, the smaller the proportion of GDP impacted by any one event. Most important, the country is wealthy. On the one hand, that means there are a lot of businesses, homes, and infrastructure to damage. (Say an earthquake hit your yard. If it damaged your vegetable garden, it might cost $20. If it damaged the garage housing your Ferrari, it might cost $200,000.) On the other, it means the country has ample resources to draw on to rebuild.

But analysts are worried about the earthquake’s impact on the country’s fiscal situation specifically. It is a fair concern: Japan’s books do not look very good. Its public debt is 228 percent of GDP, compared with 144 percent for Greece and 77 percent for the United Kingdom. Moreover, the country’s politicians have failed to tackle the debt crisis, given that borrowing costs remain so low, despite warnings from ratings agencies. In January, Standard and Poor’s cut Japan’s long-term sovereign debt rating, saying politicians had no real plan to bring the country back into the black and worrying debt levels “will continue to rise further than we envisaged before the global economic recession hit the country and will peak only in the mid-2020s.”

The question at hand is whether and how the cost of rebuilding might add so much to that debt as to worry investors and raise borrowing costs, precipitating some kind of debt crisis. In the short term, rebuilding might actually benefit Japan’s economy, as former Treasury Secretary Larry Summers pointed out on Friday. In the long term, it is hard to believe the earthquake will be the straw that breaks the fiscal camel’s back. In fiscal year 2011, the country plans to issue about $2 trillion in new debt. Its outstanding long-term government debt is about $10 trillion. If rebuilding costs reach $10 billion, which some analysts on CNBC estimated, or even $100 billion, it would be but a drop in a very big bucket. – More here

Japan convenience store sales slide 4.9% in March
by Ken Worsley

After the sales boom that followed the introduction of the Taspo card for tobacco purchases, Japan’s convenience stores have had a difficult time keeping sales up. According to data released today by the Japan Franchise Association, convenience store sales fell 4.9% in March, showing a decline for the tenth consecutive month.

The report showed foot traffic falling 1.6% to 1.05 billion people, showing a decline for the ninth month in a row. Sales per customer slipped 3.4% to 566.6 yen, dropping for the 16th consecutive month.

For FY 2009 overall, sales at convenience stores fell 4.1%, totaling 7.26 trillion yen. While the effects of the Taspo boom wearing off will last for a few more months, it seems essential for convenience stores to find a way to both attract more customers and get each customer to spend more.

Reflecting the deflationary retail environment, some Natural Lawson locations have recently been converted into cheaper Lawson 100 shops. Whether this strategy ends up helping Lawson to sell more cheap products to customers remains to be seen.

Or perhaps Lawson simply realized that its Natural Lawson outlets were selling ridiculously overpriced items in some neighborhoods saturated with cheaper Family Mart and Seven Eleven locations. – Source

Japan’s fragile economy
Kabuki economics
A set of positive indicators hides troubling realities


PICK a number, any number. Statistics released this week show that the Japanese economy staged a vigorous rebound in the fourth quarter of last year. Real gross domestic product grew by 1.1% from the previous quarter, which amounted to an annualised rate of 4.6% (see chart). The economy is growing, but the closer you look the murkier things get.

The bounce in fourth-quarter GDP partly reflects the economy’s starting point. In the previous quarter growth had been nil, having been readjusted downward twice, from an initial estimate of 1.2% in November and a revised one of 0.3% in December. (If the latest numbers are to be believed, Japan’s GDP ended up contracting by 5% last year.)

Similar revisions are possible this time round. Japan’s number-crunchers continually update the economic numbers using new information and eschew statistical methods to smooth the figures, as in other countries. Like Japanese kabuki theatre, in which characters use exaggerated gestures to energise the audience, the country’s statistics unrealistically magnify both good news and bad.

The uncertainties do not end there. The big drivers of growth last quarter were domestic demand, which contributed 2.1 percentage points to annualised GDP growth, and exports, which contributed 2.2 percentage points. (The balance came from public-sector demand.) This might suggest that Japan’s economy is gradually rebalancing away from a dependence on external demand. Not so. – More here.

Nikkei: “Devastation” awaits department stores in 2010
by Ken Worsley

The Nikkei certainly isn’t mincing words when it comes to describing the state of Japan’s department store industry. In an article entitled “More Devastation Awaits Dept Stores In ‘10,” the paper made its case for why the department store industry might see a record number of closures over the coming year.

The Nikkei points out that after five department stores had been shutting down each year, that number rose to nine in 2009 and ten are already scheduled to close this year. The current all-time high is 15 closures in 2000. That was the year in which department store giant Sogo collapsed.

According to Teikoku Databank, about 40% of Japan’s 83 department store operators were in the red in 2008. The Nikkei estimates that as many as 90% of those firms could have dipped into the red in 2009. – More here.

from the
Economic crisis looms for Japan amid financial and manufacturing problems
2/4/ 2010

TOKYO — It’s been a humbling few days for Japan.

Toyota, the nation’s largest company, announced vehicle recalls on three continents and shut down five assembly plants in the United States, and its president told the world, “We’re extremely sorry.”

Standard & Poor’s threatened to downgrade the Japanese government’s credit rating because Prime Minister Yukio Hatoyama is moving too slowly to reduce the debt.

And China overtook Japan as the world’s largest maker of cars, according to an announcement from the Japanese Automobile Manufacturers Association.

The triple whammy of manufacturing and fiscal problems is a harbinger of what Japan faces in the coming years as its listless economy meanders into an era of reckoning and national loss of face.

Within a year, Japan will probably lose to China its longtime status as the world’s second-largest economy. It is also expected to descend into the uncharted waters of public indebtedness as government debt swells to double the size of the country’s gross domestic product.

‘Quite doomed’

Although the alarming headlines grabbed the public’s attention, Japan’s most fundamental economic ills have not. Like distant melting glaciers, they have not alarmed voters, mobilized politicians or triggered a national emergency response.

“I do think the current situation is quite doomed, but Japan does not yet have a sense of crisis,” said Hiroko Ogiwara, an economic commentator and author of popular books that advise housewives on money management.

The building blocks of Japan’s future are collapsing, in the view of many economists. Japan has fewer children and more senior citizens as a percentage of its population than any country in recorded history, but the government does little to encourage childbirth or enable immigration.

Even as the working-age population shrinks, only a third of Japanese women stay on in the workforce after having a child, compared with about two-thirds of women in the United States. Government spending on education ranks near the bottom among wealthy countries.

Although the government has been talking for two decades about weaning itself from dependence on exports, Japan’s economy remains addicted to exports for growth.

And deflation, the curse of the “Lost Decade” of the 1990s, is back with a paralyzing bite. Prices and wages are falling as aging consumers save their pension checks and wait for still-lower prices. – More here.

Japanese wages continue freefall
by Ken Worsley

On Tuesday, the Ministry of Health, Labour and Welfare released its figures on wages for December 2009 and for 2009 as a whole. First, taking a look at the December figures, we see a fall of 6.1% in wages at firms with at least five employees against a year ago, with the average total wage clocking in at 549,259 yen. That figure may seem high, but winter bonuses are usually paid in December, and bonus payments fell by 10.6% against a year ago. December’s overall wage decline follows a 2.4% fall in November.

When companies with 30 or more employees were looked at, the average wage fell by 6.6%, following a 2.8% decline in November.

For 2009 as a whole, average wages at firms with five or more employees fell 3.9%, with salaries falling 1.2%, overtime pay plunging 13.5% and bonuses seeing a 12.1% drop. This equates to an overall decline of 2.9% in real wages.

At the same time, the average number of hours worked slumped 2.9% in 2009, while overtime hours fell 15.2%. Truly disturbing is the 32.2% decline in overtime hours at manufacturing firms.

According to the Ministry, 2009 is the third consecutive year in which average wages have fallen. Hope for Japanese consumers and households to spend more and thus spur a meaningful economic recovery seems more quixotic with each passing month.

Out of all of these statistics, however, one stands out as the most disturbing. In 2009, the number of regular full time workers declined by 0.9% to 32 million while the number of of part-time (or short-term contract) workers increased by 2.6% to about 12 million. Although I previously predicted that contract workers would continue to increase as a percentage of the overall working population, it still seems bewildering that Japanese firms cannot (or will not) pay enough for their workers to purchase the proverbial Model T. – Source

Government sponsored mortgage discounts coming in 2010
by Ken Worsley

It has been projected that in 2009, Japan’s housing starts will fall below the one million mark for the first time in 42 years. – More here.

Cabinet Office: Economy Watchers Survey up for seventh straight month in July
by Ken Worsley

Earlier today, the Cabinet Office released the results of its monthly Economy Watchers Survey, and the results showed a 0.2 point increase to 42.4 points.

The Economy Watchers survey is measured as an index with a score above 50 indicating a positive view of the economy and a score below 50 representing a pessimistic overall view. The survey measures sentiment amongst taxi drivers, restaurant staff, barbers, and other service industry workers sensitive to frontline economic conditions. The index itself has now been below the 50 mark for the past 27 months. – More here.

Japan’s public pension fund lost a record 10.17 trillion yen in fiscal 2008
by Ken Worsley

In fiscal 2006 and 2007, Japan’s public pension system managed to log losses. In FY2007, the fund earned money on government bonds, but lost a whopping 7.5 trillion in in equities positions. The total FY2007 loss, 5.65 trillion yen, was the largest on record. Until fiscal 2008.

Yesterday it was announced that the public pension fund lost 10.17 trillion yen in FY2008. This was the third straight year in which the fund has lost money. According to the a report from the Ministry of Health, Labour and Welfare, The fund experienced a 0.9% increase in revenue due to premium rises, while pension payouts increased by 2.7%.

Thus, the fund itself saw a rise in payouts that outstripped the increase in premiums, while losing 10.17 trillion yen at the same time.

Are the manifestos of either political party valid at this point? – Source

March corporate goods price index down 2.2%
by Ken Worsley

Yesterday, the Bank of Japan released its monthly Corporate Goods Price Index, and the report showed a 2.2% decrease in March wholesale prices compared to a year ago. Wholesale prices have now fallen for three consecutive months, and the fall last month was the largest on record since 2002.

Last August, wholesale prices shot up 7.1% and hit a 27 year high, as commodity prices peaked out. Reuters goes as far to say that “[W]ith both domestic and external demand faltering, Japan could be the slowest among major economies to recover from recession.” This, of course, does not jive with Prime Minister Taro Aso’s New Year’s promise that Japan will be the first nation to recover from the global recession.

A spectre is haunting Japan – the spectre of deflation. In both January and February, the core consumer price index remained flat, and February’s overall index showed a decline of 0.3%. There is now a strong expectation that March core CPI will show the first decline since September 2007. It appears as though there is a clear output gap, and inventory is not moving – household spending was down 3.5% in February. – Source

A brand new scare graph: Japan’s collapsing exports
by Ronan Lyons

I have just discovered a set of global trade statistics updated monthly by the Dutch Bureau for Economic Policy Analysis (CPB). (Incidentally, this is not the first time I’ve come across excellent work by the CPB – their work on administrative burdens imposed by regulation is essentially the international pioneer on the topic and has informed EU thinking on how to cut red tape.)

Rather than hundreds of words of rapier-sharp analysis, I thought I would just post one graph that I thought was the single most shocking thing I’ve seen this recession yet: Japan’s trade figures.

Japan’s exports and imports, Jan 2000-Jan 2009

More here.

Restaurant sales fall for third straight month in February
by Ken Worsley

In 2008, McDonald’s Japan became the first restaurant company to surpass 500 billion yen in sales over a year. 2008 was the fifth consecutive year in which sales had grown for McDonald’s. November 2008 alone saw a 14.4% increase in sales, and it looked as though McDonald’s would be one of those firms uniquely positioned to hold their ground during the economic downturn.

The rest of the restaurant industry, however, looks to be some trouble. According to data released today by the Japan Foodservice Association, sales at restaurants fell 3.6% against a year ago in February, showing a decline for the third consecutive month. Of course, last February fell in a leap year, and the loss of one day is estimated to account for 3% of the drop in sales. Still, pubs and izakayas saw a 7.1% drop in sales, while they fell 6.1% at family restaurants and 5.7% at coffee shops. Fast food shops saw a 0.3% decline, for the first fall in five months.

The JFA also noted that customer numbers fell 4.9% in February while the average purchase increased by 1.4%. – Source

Japan exports nearly halve in deepening recession
2/25/2009/2:24 A.M. EST
by Yuzo Saeki

TOKYO, Feb 25 (Reuters) – Japan’s exports nearly halved in January from a year earlier, with record slides in shipments to the United States, Europe and the rest of Asia pointing to a deepening recession across much of the world.

Japanese car exports fell by two-thirds from a year earlier, accelerating from a 45 percent annual decline seen in December, as the value of overall exports hit a 10-year low.

“We don’t see any signs of a pick-up in the Japanese economy in the near term. The economy will gradually worsen further,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“Exports to Asia, particularly to China, are tumbling at about the same pace as shipments to the United States, signalling [reuters’ spelling error] that even China’s economy may be shrinking,” Minami said.

Many factories in China and elsewhere in Asia use Japanese components to make goods that are ultimately sold in the West.

Federal Reserve Chairman Ben Bernanke warned on Monday of a prolonged recession in the United States, one of Japan’s major markets, and President Barack Obama, while positive for the longer term, told Congress there were no quick fixes for the economy.

Asian countries rely heavily on manufactured exports and have been hit hard as the global financial crisis prompts Western consumers to curtail spending.

“In Asia, the world’s manufacturing plant, the slump in the global economy will continue to weigh on production activities and likely to lead to a further decline in exports of semiconductors,” Kyohei Morita, chief economist at Barclays Capital, said in a report.

Japan is among the worst affected with the 45.7 percent plunge in exports in January from a year earlier, a much deeper fall than seen so far in South Korea and China.

For a graphic comparing the three countries’ exports, click: here

January figures were affected by Lunar New Year holidays that closed some key Asian export markets for several days.

Japanese exports to the rest of Asia sank 46.7 percent from a year earlier, the fourth straight month of decline, with shipments to China falling 45.1 percent, data showed on Tuesday.

The decline in Japanese exports to other emerging markets is also accelerating. Sales to Brazil fell 38 percent, more than six times the drop seen in December data.

Japan’s economy shrank last quarter at its fastest pace since the first oil crisis of the 1970s and economists said the latest figures added to concerns that the recession was worsening.


The collapse in global demand has left manufacturers with piles of unsold goods, forcing many leading Japanese companies to slash production at an unprecedented pace.

Japanese car makers also reported sharp falls in their output in January, with Toyota Motor Corp (7203.T) reporting its biggest fall in global output and with that at Nissan Motor Co Ltd (7201.T) slumping to the lowest level in records going back to 1984.

Japanese industrial output is expected to have fallen 10 percent in January, a Reuters poll shows, even deeper than the record fall seen in December.

The dismal export figures point to further production cuts in the coming months as companies try to clear inventories. – More here.

from AFP:
Japan says economic crisis worst since WWII

TOKYO — Japan warned Monday it was in the deepest economic crisis since World War II, after Asia’s biggest economy suffered its worst contraction in almost 35 years.

The economy shrank for a third straight quarter in the three months to December as the global slowdown crushed demand for Japanese exports, a key pillar of the world’s number two economy.

The government said the slump was even worse than the recession of the 1990s when the country’s economic bubble burst, ushering in a decade of economic stagnation and deflation.

Japan’s economy contracted 3.3 percent in the fourth quarter of 2008 — 12.7 percent on an annualised basis, official data showed.

It was the weakest performance since 1974 when the country was reeling from the first oil crisis, and the government said this slump would be even more severe.

“This is the worst ever crisis in the post-war era. There is no doubt about it,” Economic and Fiscal Policy Minister Kaoru Yosano said, warning that a rebound is impossible before the global economy improves.

The figures were even more dismal than analysts had expected and marked a sharp deterioration compared with the third quarter’s 0.6 percent contraction.

The current recession will be Japan’s “longest, deepest and most severe in the post-war period,” said Glenn Maguire, chief Asia economist at Societe Generale in Hong Kong. – More here.

CRS Report for Congress
U.S.-Japan Economic Relations

Japan and the United States are the two largest economic powers. Together they account for over 40% of the world domestic product… The U.S.-Japan economic relationship is very strong and mutually advantageous. The two economies are highly integrated via trade in good and services… More here.

Yearly statistics on Japan

More information on Japan’s economy:

Bank of Japan Statistics

Labour Force Survey of Japan (2005-2009)

The Labour Force Survey is a survey of households usually residing in Japan. Its purpose is to elucidate the current state of employment and unemployment in Japan every month.

Japanese discrimination against the Barukumin and Ainu.