EconomyEconomy discussion forum. Discuss the politics and effects of the general economy and global economic collapse here. Please keep all politics out of the Finance and Investment subforum.
It's interesting to watch responses to the crisis from a cultural perspective. Westerners like to criticize Asians because they don't run around like crazed maniacs every time something unexpected happens. They just sort of methodically stick to the plan and plod along until they see an overwhelming reason to change course.
It's not surprising that an American company would expect Japanese buyers to back out at the last minute. And it's equally unsurprising that a Japanese company would refuse.
Americans are trained almost from birth to always do whatever is in their immediate best interest. Building a half-assed nuclear power plant, tearing it down prematurely and replacing it with something else new and untested -- these are all perfectly logical things for Americans to do. But they are horrifying in the view of Easterners. Asians plan ahead. They start small. They build upon success and strive for perfection. Honda put lawn mower engines in their first vehicles. And they haven't changed too much since then. Westerners think big. They work hard. They don't sweat the small stuff. And they git 'er done. Ford designs a completely new engine for every single model, each one bigger and better with more horsepower than the last.
It's a fundamental cultural divide. It's the reason that crazy Europeans built ships and armor and set out in some random direction and colonized America while Asians were busy perfecting their densely packed cities filled with tiny apartments. It's the reason the space race was between two sets of blond-haired blue-eyed Europeans. Asians see little value in large scale change -- they prefer incrementalism. Westerners are addicted to novelty. For their ideology, Asia has had tens of centuries of stable growth. The West has had a history of explosive growth, followed by stagnation. What do we have on the moon? A flag. And a footprint. When will we be back? Just as soon as we stumble upon another trillion barrels of oil.
Westerners are the little automaton that, whenever it reaches an obstacle, flips out and starts destroying things. Easterners are the little automaton that backs up a little bit and goes in a slightly different direction. In the short run, the Western automaton will make huge gains and end up on the other side of the maze. But in the long run, the Eastern automaton will be the one that has made a map.
Look at the response from Asia: "Why didn't you stay put and follow the procedures?". From the West: "Why didn't you think outside the box and seek out help?" Look at what the West is doing two weeks later: shipping in water. Water. They have water. But oh no, this is special water. It's new water. Fresh water. It's better than the water they have been using for two weeks. It won't rust. The thought never once occurred to the American Heroes(tm) flying in the special shipment of water that maybe, at this point, seawater has been used for two weeks and rust is a foregone conclusion and special water is not really an improvement. But that will not deter them. They will be back again with more special water. Because that's what they do... over hill, over dale. They will cobble together some means of transport and set out over the horizon in search of new things, possibly valuable things, but probably not. Definitely new though.
There are books written about it. US diplomats like Brzezinski use it as a veiled threat whenever the prospect of Chinese economic dominance is broached -- "don't get too confident, something might blow up. something might change." You can believe president Hu when he says that the growing Chinese military poses no threat to anyone. Attacking anyone would upset too much to be worthwhile. Asians recognize this. Westerners don't. They see value in destruction. They vote for "change".
If an Asian economy blows up due to something unexpected, they are crippled. There is no place in the plans for the unexpected. Everything stops. The unexpected is rooted out, possibly over a long period of time. It is discovered, explained, and eliminated. And it won't be coming back. A Westerner, however, expects the unexpected. It is minimized. It is rationalized. It is glossed over and it will be back. And when it does, the Westerner will be just as determined to ignore it again in the future.
tl;dr -- the Japanese will make a few minor corrections including not buying any more crap from GE, move on, and be back to dominating global trade within a few years.
Nice post. Good analysis. I concur with the conclusions.
10.59 Clock: Bleak economic outlook for Japan: "We expect production to fall by up to ten per cent in the next few months, "said George Worthington, chief economist for the region said at IFR Markets. In particular, the manufacturer of automobiles and electronic equipment had to stop their production because they have hardly any supplies and also make them difficult to create the power outages. International supply shortages threaten.
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10.59 Clock: Bleak economic outlook for Japan: "We expect production to fall by up to ten per cent in the next few months, "said George Worthington, chief economist for the region said at IFR Markets.
That's a baseline forecast assuming that this accident more or less goes away starting now.
Problem: I-131 is not present in large quantities in spent fuel. The fact that the seawater I-131 is increasing rapidly means, virtually without a doubt, that there is a reactor breach in at least one of reactors.
Moreover, the water is outside the reactor buildings in turbine buildings and in tunnels which means virtually certainly that the breached reactor has also lost integrity in both concrete containment structures (or there are valves/pipes that cannot be shut off, which amounts to the same thing).
=> this accident goes on until the leaked are somehow plugged. This won't happen tomorrow. In fact, it should take weeks on the optimistic side. On the pessimistic side, an area roughly the size of ohio around the plant becomes unihabitable for at least 12,000 years.
Plutonium leakage is happening. In what quantity? From where? This stuff is so deadly, it's unimaginable. A millionth of a gram of it is enough to give you cancer. And the primary isotope relevant here has a half-life of over 24 thousand years. It's heavier than lead. It just sits there in the soil for millenia.
Where it gets above the legal limit in the soil, that land will have to be abandoned forever (given current technology).
Honda is slashing production levels at its north American auto plants.
__________________ * I have the right to live, thus I have the right to defend my life from attackers who would take it from me.
* I have the right to my private property, thus I have the right to defend my property from thieves who would take it from me.
* I have the right to self-determination, thus I have the right to defend my liberty from tyrants who would take it from me.
* The only usable tools for these tasks are guns, and thus I have the right to shoot anyone who would take my guns from me.
Restaurants and fisheries are taking a beating as a result of the quake, tsunami and nuclear crisis.
Quote:
According to the Fisheries Agency, the killer quake and tsunami caused damage to more than 6,000 fishing boats and over 100 fishing ports in the Tohoku region, with most of them completely destroyed. The actual extent of damage to the fishing industry in Iwate and Miyagi prefectures has yet to be studied, though the final figures are expected to be enormous. The oyster and wakame farms in the Sanriku region are waiting for a more detailed survey, but many of them are presumed to have been flattened.
Fishing ports that were crippled by the quake and tsunami will be preferentially repaired through public works projects, which usually takes two to three years at the longest.
"The extent of damage is just so great, it is impossible to estimate how long rebuilding will take. We also need to study how many people will be able to continue fishing after their facilities and equipment are restored," said a Fisheries Agency official.
Tokyo Electric Power Co., or Tepco
(JP:9501 495.00, +29.00, +6.22%)
Tepco could be facing compensation claims that could potentially reach 10 trillion yen ($130 billion) under a worst-case scenario, according to an estimate by the Bank of America Merrill Lynch.
more than 28000 dead and missing
more than $300B damage
Euro/$ = 1.416
Yen/$=82.73
intrade level 6,7 (31.April) = 49,10
intrade 4th,5th,6th explosion (31.March) = 4,6,3
intrade evacuation in Tokyo (30.April) = 10
intrade evacuation zone extended 30,50,75,100km(30.April):35,11,27,24
Japan needs to import some 80% of its energy requirements.
Its first commercial nuclear power reactor began operating in mid 1966, and nuclear energy has been a national strategic priority since 1973.
The country's 50 main reactors provide some 30% of the country's electricity and this is expected to increase to at least 40% by 2017.
World Nuclear Association
With:
Fukushima-Daiichi-1 Out, Destroyed
Fukushima-Daiichi-2 Out, Destroyed
Fukushima-Daiichi-3 Out, Destroyed
Fukushima-Daiichi-4 Out, Destroyed
Fukushima-Daiichi-5 To be decommissioned
Fukushima-Daiichi-6 To be decommissioned
Fukushima-Daiichi-7 Planned, Wont be built
Fukushima-Daiichi-8 Planned, Wont be built
There is going to be a lot changes in the next "Five-Year Plan"
Fear driven frugality and saving money represents the new normal.
Quote:
Japan's new car sales posted their biggest ever drop for March after the earthquake and tsunami in northeastern Japan.
The Japan Automobile Dealers Association says almost 280,000 new cars, excluding mini vehicles, were sold in March. That's down 37 percent from a year ago and the largest decline for the month since record-keeping began in 1968.
The chairman of Suzuki Motor has indicated that the company may have to stop production at its overseas plants as early as May, as the disaster that hit Japan on March 11th is making it difficult to procure components.
Osamu Suzuki told reporters on Friday that the automaker's main overseas plant in India and other production bases can operate for now, as components shipped before the quake are being delivered to them.
He said, however, that the plants will face parts shortages in May if the situation remains unchanged.
Japanese government lowers its assessment of its national economy.
__________________ * I have the right to live, thus I have the right to defend my life from attackers who would take it from me.
* I have the right to my private property, thus I have the right to defend my property from thieves who would take it from me.
* I have the right to self-determination, thus I have the right to defend my liberty from tyrants who would take it from me.
* The only usable tools for these tasks are guns, and thus I have the right to shoot anyone who would take my guns from me.
__________________ * I have the right to live, thus I have the right to defend my life from attackers who would take it from me.
* I have the right to my private property, thus I have the right to defend my property from thieves who would take it from me.
* I have the right to self-determination, thus I have the right to defend my liberty from tyrants who would take it from me.
* The only usable tools for these tasks are guns, and thus I have the right to shoot anyone who would take my guns from me.
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