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Old 03-15-2011, 11:32 AM   #1
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Default economic and political impact of Japan earthquake

1450: BBC's Mark Gregory has been looking at the economic impact of the quake. Early estimates have put the cost at £112bn ($180bn), equal to 3% of national output. "That's a large burden for a nation that even before last week's disaster had the highest public debt - 200% of GDP - of any advanced economy," he says.

##eqecat earlier said $100B

1443: Andrew Coad, from Tokyo, writes: "For German Foreign Minister Guido Westerwelle to describe the nuclear events in Japan as an "apocalypse" is irresponsible in the extreme. At this point in time there has been no confirmed reports of any leakage of core material into the environment. So far it has been contained."

## Westerwelle desperately searching for something where he can get attention
## and make points. He's not popular ATM

1436: The IAEA says Monday's blast at Fukushima may have affected the integrity of the containment vessel - there are fears of more serious radioactive leaks if happen.

## Tepco should know, but won't tell us


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intrade level 5,6,7 : 93,33,14

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Old 03-15-2011, 03:01 PM   #2
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STRATFOR
---------------------------
March 15, 2011


JAPAN: UTILITY COMPANIES DECLARE FORCE MAJEURE

Japan's Tokyo Electric Power Co. and Tohoku Electric Power have declared a force majeure, as plant closures and lost port capacity have rendered them unable to receive coal shipments, Argus reported March 15. The two companies have issued letters to coal producers in countries such as Australia and Indonesia, and, along with Japan's Joban Joint Power, are seeking to divert cargoes to other utility companies, according to Japan-based traders.

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Old 03-15-2011, 04:27 PM   #3
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March 15, 2011


JAPAN, THE PERSIAN GULF AND ENERGY



By George Friedman

Over the past week, everything seemed to converge on energy. The unrest in the Persian Gulf raised the specter of the disruption of oil supplies to the rest of the world, and an earthquake in Japan knocked out a string of nuclear reactors with potentially devastating effect. Japan depends on nuclear energy and it depends on the Persian Gulf, which is where it gets most of its oil. It was, therefore, a profoundly bad week for Japan, not only because of the extensive damage and human suffering but also because Japan was being shown that it can't readily escape the realities of geography.

Japan is the world's third-largest economy, a bit behind China now. It is also the third-largest industrial economy, behind only the United States and China. Japan's problem is that its enormous industrial plant is built in a country almost totally devoid of mineral resources. It must import virtually all of the metals and energy that it uses to manufacture industrial products. It maintains stockpiles, but should those stockpiles be depleted and no new imports arrive, Japan stops being an industrial power.

The Geography of Oil

There are multiple sources for many of the metals Japan imports, so that if supplies stop flowing from one place it can get them from other places. The geography of oil is more limited. In order to access the amount of oil Japan needs, the only place to get it is the Persian Gulf. There are other places to get some of what Japan needs, but it cannot do without the Persian Gulf for its oil.

This past week, we saw that this was a potentially vulnerable source. The unrest that swept the western littoral of the Arabian Peninsula and the ongoing tension between the Saudis and Iranians, as well as the tension between Iran and the United States, raised the possibility of disruptions. The geography of the Persian Gulf is extraordinary. It is a narrow body of water opening into a narrow channel through the Strait of Hormuz. Any diminution of the flow from any source in the region, let alone the complete closure of the Strait of Hormuz, would have profound implications for the global economy.

For Japan it could mean more than higher prices. It could mean being unable to secure the amount of oil needed at any price. The movement of tankers, the limits on port facilities and long-term contracts that commit oil to other places could make it impossible for Japan to physically secure the oil it needs to run its industrial plant. On an extended basis, this would draw down reserves and constrain Japan's economy dramatically. And, obviously, when the world's third-largest industrial plant drastically slows, the impact on the global supply chain is both dramatic and complex.

In 1973, the Arab countries imposed an oil embargo on the world. Japan, entirely dependent on imported oil, was hit not only by high prices but also by the fact that it could not obtain enough fuel to keep going. While the embargo lasted only five months, the oil shock, as the Japanese called it, threatened Japan's industrial capability and shocked it into remembering its vulnerability. Japan relied on the United States to guarantee its oil supplies. The realization that the United States couldn't guarantee those supplies created a political crisis parallel to the economic one. It is one reason the Japanese are hypersensitive to events in the Persian Gulf and to the security of the supply lines running out of the region.

Regardless of other supplies, Japan will always import nearly 100 percent of its oil from other countries. If it cuts its consumption by 90 percent, it still imports nearly 100 percent of its oil. And to the extent that the Japanese economy requires oil -- which it does -- it is highly vulnerable to events in the Persian Gulf.

It is to mitigate the risk of oil dependency -- which cannot be eliminated altogether by any means -- that Japan employs two alternative fuels: It is the world's largest importer of seaborne coal, and it has become the third-largest producer of electricity from nuclear reactors, ranking after the United States and France in total amount produced. One-third of its electricity production comes from nuclear power plants. Nuclear power was critical to both Japan's industrial and national security strategy. It did not make Japan self-sufficient, since it needed to import coal and nuclear fuel, but access to these resources made it dependent on countries like Australia, which does not have choke points like Hormuz.

It is in this context that we need to understand the Japanese prime minister's statement that Japan was facing its worst crisis since World War II. First, the earthquake and the resulting damage to several of Japan's nuclear reactors created a long-term regional energy shortage in Japan that, along with the other damage caused by the earthquake, would certainly affect the economy. But the events in the Persian Gulf also raised the 1973 nightmare scenario for the Japanese. Depending how events evolved, the Japanese pipeline from the Persian Gulf could be threatened in a way that it had not been since 1973. Combined with the failure of several nuclear reactors, the Japanese economy is at risk.

The comparison with World War II was apt since it also began, in a way, with an energy crisis. The Japanese had invaded China, and after the fall of the Netherlands (which controlled today's Indonesia) and France (which controlled Indochina), Japan was concerned about agreements with France and the Netherlands continuing to be honored. Indochina supplied Japan with tin and rubber, among other raw materials. The Netherlands East Indies supplied oil. When the Japanese invaded Indochina, the United States both cut off oil shipments from the United States and started buying up oil from the Netherlands East Indies to keep Japan from getting it. The Japanese were faced with the collapse of their economy or war with the United States. They chose Pearl Harbor.

Today's situation is in no way comparable to what happened in 1941 except for the core geopolitical reality. Japan is dependent on imports of raw materials and particularly oil. Anything that interferes with the flow of oil creates a crisis in Japan. Anything that risks a cutoff makes Japan uneasy. Add an earthquake destroying part of its energy-producing plant and you force Japan into a profound internal crisis. However, it is essential to understand what energy has meant to Japan historically -- miscalculation about it led to national disaster and access to it remains Japan's psychological as well as physical pivot.

Japan's Nuclear Safety Net

Japan is still struggling with the consequences of its economic meltdown in the early 1990s. Rapid growth with low rates of return on capital created a massive financial crisis. Rather than allow a recession to force a wave of bankruptcies and unemployment, the Japanese sought to maintain their tradition of lifetime employment. To do that Japan had to keep interest rates extremely low and accept little or no economic growth. It achieved its goal, relatively low unemployment, but at the cost of a large debt burden and a long-term sluggish economy.

The Japanese were beginning to struggle with the question of what would come after a generation of economic stagnation and full employment. They had clearly not yet defined a path, although there was some recognition that a generation's economic reality could not sustain itself. The changes that Japan would face were going to be wrenching, and even under the best of circumstances, they would be politically difficult to manage. Suddenly, Japan is not facing the best of circumstances.

It is not yet clear how devastating the nuclear-reactor damage will prove to be, but the situation appears to be worsening. What is clear is that the potential crisis in the Persian Gulf, the loss of nuclear reactors and the rising radiation levels will undermine the confidence of the Japanese. Beyond the human toll, these reactors were Japan's hedge against an unpredictable world. They gave it control of a substantial amount of its energy production. Even if the Japanese still had to import coal and oil, there at least a part of their energy structure was largely under their own control and secure. Japan's nuclear power sector seemed invulnerable, which no other part of its energy infrastructure was. For Japan, a country that went to war with the United States over energy in 1941 and was devastated as a result, this was no small thing. Japan had a safety net.

The safety net was psychological as much as anything. The destruction of a series of nuclear reactors not only creates energy shortages and fear of radiation; it also drives home the profound and very real vulnerability underlying all of Japan's success. Japan does not control the source of its oil, it does not control the sea lanes over which coal and other minerals travel, and it cannot be certain that its nuclear reactors will not suddenly be destroyed. To the extent that economics and politics are psychological, this is a huge blow. Japan lives in constant danger, both from nature and from geopolitics. What the earthquake drove home was just how profound and how dangerous Japan's world is. It is difficult to imagine another industrial economy as inherently insecure as Japan's.

The earthquake will impose many economic constraints on Japan that will significantly complicate its emergence from its post-boom economy, but one important question is the impact on the political system. Since World War II, Japan has coped with its vulnerability by avoiding international entanglements and relying on its relationship with the United States. It sometimes wondered whether the United States, with its sometimes-unpredictable military operations, was more of a danger than a guarantor, but its policy remained intact.

It is not the loss of the reactors that will shake Japan the most but the loss of the certainty that the reactors were their path to some degree of safety, along with the added burden on the economy. The question is how the political system will respond. In dealing with the Persian Gulf, will Japan continue to follow the American lead or will it decide to take a greater degree of control and follow its own path? The likelihood is that a shaken self-confidence will make Japan more cautious and even more vulnerable. But it is interesting to look at Japanese history and realize that sometimes, and not always predictably, Japan takes insecurity as a goad to self-assertion.

This was no ordinary earthquake in magnitude or in the potential impact on Japan's view of the world. The earthquake shook a lot of pieces loose, not the least of which were in the Japanese psyche. Japan has tried to convince itself that it had provided a measure of security with nuclear plants and an alliance with the United States. Given the earthquake and situation in the Persian Gulf, recalculation is in order. But Japan is a country that has avoided recalculation for a long time. The question now is whether the extraordinary vulnerability exposed by the quake will be powerful enough to shake Japan into recalculating its long-standing political system.


This report may be forwarded or republished on your website with attribution to www.stratfor.com.

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Old 03-15-2011, 04:33 PM   #4
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Arrow

http://money.cnn.com/2011/03/15/mark..._stock_movers/

General Electric and insurance companies down sharply.
---

http://www.bloomberg.com/news/2011-0...nese-food.html

Asian countries are already checking food imports from Japan. I think Japanese food exports are going to be hit hard this year, putting yet more pressure on an already heavily stressed and weak economy.
---

http://www.google.com/hostednews/can...?docId=6256490

Two auto plants; a Toyota plant in Ontario, Canada, and a Subaru plant in Lafayette, Indiana; have halted production due to concern about parts availability from Japan. I think we will be seeing more of this, and as a results some domestic layoffs.
---

http://www.bloomberg.com/news/2011-0...raud-case.html

Commodity prices, including oil, industrial metals and grain, down on Japan crisis.
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Old 03-16-2011, 02:44 AM   #5
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0625: Shares in Fukushima's operator TEPCO plunge 24%7 in Tokyo's trade, the AFP reports.
0623: Workers at the Fukushima plant have returned after being evacuated, CNN is quoting Tokyo Electric Power Company as saying.
0611: Tokyo stocks rebound sharply after Tuesday's dramatic plunge, with the Nikkei up 5.68%.
0524: Taro Kono, a Japanese opposition politician, criticises the government for not releasing information about the smoke above the Fukushima nuclear plant earlier. He tells the BBC that a three-hour delay in informing people has caused concern among the population.
0433: France is now urging its nationals in Tokyo to leave Japan or head to the south of the country, Reuters reports. It says Paris has asked the Air France carrier to provide planes for the evacuation.
0320: Staff have now been evacuated from Fukushima because of a spike in radiation levels, Chief Cabinet Secretary Yukio Edano told a news conference.
0211 : The Daily Yomiuri tweets: "Tokyo Electric officials say the white smoke being reported at the Fukushima No1 nuclear plant could possibly be steam."

Nikkei225 = 9094 (+5.68%)
oil(WTI)=98.3
gold=1400
Yen/Euro=0.0089(+0.37%)

Intrade explosion 4,5,6 = 70,33,13
---- update:IAEA at 5,6,7: 89,59,17

Intrade IAEA level 5,6,7 = 94,55,12

Tepco(9501):921Yen = -25%
2100Yen before the Earthquake , now 921 Yen
http://www.bloomberg.com/apps/quote?ticker=9501:JP

market worth of the company = $17B , down from $35B
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Old 03-16-2011, 03:27 AM   #6
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Focus live ticker in Deutsch:
http://www.focus.de/politik/deutschl...id_609102.html

in English:
http://translate.google.com/translat...6prmd%3Di vns


http://gsgs.synthasite.com/news.php
http://gsgs.synthasite.com/news2.php

» Latest Japanese Earthquake Moved the Island Eight Feet Closer to U.S. West Coast
» After Quake in Northeast, Another Quake Hits Tokyo Area
» Wells FargoTeller Demands Two Forms Of ID From Robber
» After Quake in Japan, Germany Announces Shutdown of Seven Reactors
» Japanese Auto Manufacturers Shut Down Plants After Tsunami
» Obama Approval Rating Falls to 50 Percent
---------------------------------------------------------
http://www.shortnews.com/newsticker/free/5/index.cfm
-----------------------------------------------------------

who has the best live-ticker ?
I'm not yet content with this one.
many lines, slowly scrolling, few ads, good importance-filter,
filter by subject-groups (politics,economy,sport,health,...)


quick future-charts : http://www.finviz.com/futures.ashx
hattip mixin

Tokyo Geiger counter :
http://translate.google.com/translat...%26prmd%3Divns
hattip Samen
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Old 03-16-2011, 11:26 AM   #7
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Estimated Total Insured Losses at $12-25 Billion USD for M9 Tohoku Pacific Offshore Event


googling, how it was in Kobe:
total insured losses from the Kobe quake were only about $6 billion
although losses in the Kobe earthquake of 1995 topped $100 billion,
insured losses were in the region of $6 billion
After the Kobe earthquake of 1995 insured losses amounted to USD3.5bn
although economic losses were close to USD100bn
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Old 03-16-2011, 04:16 PM   #8
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¥55,600,000,000,000

($700 Billion)

Total rumored amount to keep the Nikkei going for the last four days.
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Old 03-17-2011, 01:44 AM   #9
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BBC:


0515:Australia to advise its citizens to leave Tokyo and its vicinity
0503(GMT?):Asahi Shimbun says the country is facing "an unprecedented national crisis".
(subsequently referring to Fukushima)
0454: Radiation level unchanged despite choppers dousing reactor - Kyodo, quoting Tepco.
0401: Ceiling of Reactor 4 reduced to frame,
0358: The US is chartering aircraft to Tokyo help Americans leave Japan
0336: Reactor 4 still had water in its spent-fuel pool as of Wednesday
0312: a similar rise in the value of the yen took place after the Kobe earthquake in 1995
0138: The Bank of Japan has pumped an extra five trillion yen into the money markets which have been shaken by the quake, tsunami and unfolding nuclear power plant drama. The move raises its total funds injected since Monday to 33 trillion yen. In early trading on Thursday the benchmark Nikkei index has plunged more than four percent
0110: And US nuclear experts believe there is no water left in Reactor 4's cooling pool, meaning radiation levels are extremely high there.
0057: There are two helicopters now working above Reactor 3 - NHK television. Each is capable of dropping 7.5 tonnes of water, it says.
0044: Japanese Economics Minister Kaoru Yosano says the yen's jump is driven by speculative moves, denying that Japanese insurers' currency repatriation is behind the surge - Reuters
0043: The Bank of Japan offers to inject a further 5tn yen ($61bn) into the banking
0005: (Fukushima Dai-ni, has reportedly been cooled down safely).
0004: It's 0904 local time after another freezing night in the north.
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Old 03-17-2011, 02:49 AM   #10
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intrade expl 4,5,6 = 50,20,10
intrade IAEA 5,6,7 = 74,50,14

Nikkey225 = 8963 (-1.44%)
Oil(WTI)=99.12
Gold=1394
Dow Jones=11613(-2.04%)
Euro/Yen=110.21(~-3%)
http://shared.websol.barchart.com/ch...d721a0eab9.png

Tepco:798(-13.4%)
Japan 5y CDS = 130(+22.5) (76 last week)
iTraxx Japan = 153(+13)
http://www.tse.or.jp/english/market/...0000006a29.gif
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Old 03-18-2011, 03:48 AM   #11
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2011/03/18,08:00UTC
Nikkei225=9207(+2.7%)
Oil(WTI)=102.6
Gold=1413
Dow Jones=11775(+1.4%)
Tepco(9501)=948(+19%)
Yen/Euro=0.00869(-3.3%)
$/Yen=81.87
Japan CDS =104.5(-13)
iTraxx Japan = 129(-21)
Bank or Japan support = $451B (+$45B)
Intrade IAEA level 5,6,7 = 53,33,10
16600 dead or missing
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Old 03-18-2011, 05:26 AM   #12
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It's amazing when a central banker decides to create electronic money to become the buyer of last resort.....

Who wants to bet that the bank of Japan now owns a significant percent of the Japanese stock exchange?
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Old 03-18-2011, 06:03 AM   #13
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They are effectively bailing out insurance companies using taxpayer
wealth ( ie diluting the currency , which is a form of taxation ) .

If the stock market crashed in the USA or Japan then wealthy
foreign interests ( think China ) could move in and buy your high tech
and other good companies for peanuts because they are sitting on
a massive pile of USD$ bills .

IMO money printing defers this but on its own does not prevent it .

Without foreign ownership controls the massive pile of $bills being
printed could eventually be used to strip you of your best assets.

And while the USD$ maintains market credibility it can be converted
to AUD$ and used to strip Australia of our assets. Foreign ownership
controls are the only form of viable protection I can see at this moment.

Japan bailing out insurance companies also puts the Yen under less
upward pressure because the Companies may otherwise need to indulge in
forced sales of foreign assets.

Frankly I would not be at all surprised to find our regulators are asleep at the
wheel and foreign interests continuously and surreptitiously gaining control
via concealed ownership techniques.
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Old 03-18-2011, 06:38 AM   #14
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yesterday : Yen down , stocks down , CDS up (rating worse)
today : Yen up , stocks up , CDS down (rating better)

(?)
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Old 03-18-2011, 02:43 PM   #15
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Quote:
In the meantime, the Japanese economy is slowing grinding to a halt as more people leave Tokyo, as factories lie dormant, and as high tech supply chains are suddenly halted. Out estimate, unlike that of an increasingly less than credible Bloomberg, is that the adverse impact to 2011 world GDP will be well at least 2% when all is said and done just factoring the events to date. Should the situation continue to stagnate it will get far worse.

Source ... ZH


Note ... unsure of chart date .
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Old 03-20-2011, 09:35 AM   #16
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latest Barclays Capital estimate : $US185 billion
many insurance experts believe it will be well over $US200 billion
worldbank estimates $122B-$235B
police estimates 18000 deaths
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Old 03-20-2011, 09:41 AM   #17
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I wonder how long it will take Japan to recover from this?
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Old 03-25-2011, 12:43 AM   #18
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nisa: http://www.nisa.meti.go.jp/english

situation 24.March:
http://www.nisa.meti.go.jp/english/f...110325-1-1.pdf

declared "level 6" (?)

--------------------------------

more than 26000 dead and missing
more than 200B Euro damage
Euro/$ = 1.4165
Yen/$=81.00
intrade level 6,7 (31.March) = 30,16
intrade 4th,5th,6th explosion (31.March) = 4,6,3
intrade Tokyo evacuation (30.April) = 17
intrade evacuation zone extended 30,50,75,100km(30.April):35,27,11,24

Dow:12170
Eurostoxx:2910
BundFuture:122.05
Oil(WTI)=105
Gold=1433
iTraxxJapan=114
Nikkey:9536
Tepco(9501):846yen(-6.2%)
Tepco CDS : 340(+76)


Tokyo radiation: http://magictour.free.fr/radtok7.JPG
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Old 03-25-2011, 02:16 AM   #19
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Japan has a political system so set in its ways that it has trouble adapting to creeping change, let alone emergencies on a biblical scale. Too often, the flip side of Japan’s deference is an establishment able to blunder on without fear of protest and social strife.

For the government, the task is to get ahead of the crisis. So far events have left it always looking a day or two behind. What’s more, it has been unable to pull together a crisis team, involving experts from business and elsewhere, that might give a sense of leadership on every front of the disaster. Part of the problem is crass intransigence by the opposition. Mr Kan’s overtures to opposition politicians for a cabinet of national unity have so far been rejected. Meanwhile, the opposition is still scoring points over next year’s proposed budget. Legislation to finance the budget is meeting obstruction, even though more funds will be needed for disaster relief.

The staggered power cuts are also proving ill-conceived. Interrupting power even for a few hours sometimes forces factories to shut all day, says the boss of a large chemical firm. After a shutdown it can take hours to recalibrate machinery.
http://www.economist.com/node/18441111
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Old 03-26-2011, 05:16 AM   #20
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the Japanese government estimates the direct damage at $310B
>10000 confirmed deaths
17000 still missing

I know it's Nikkei , not Nikkey but I use Nikkey as a
keyword to find this thread
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Old 03-26-2011, 11:28 AM   #21
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I thought I would kick a note in here....

I am involved with building Process Loop Control systems (PLCs). My parts come from Asia. Any blip "over there", screws with the products I require. I got an email yesterday that showed continued availability for processors TMS430F2419TPN. So, so far, I am OK.

I am still worried about the rest of the surface mount stuff?!
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Old 03-26-2011, 08:11 PM   #22
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Japan Airlines Corp. is expected to finish its court-administered business rehabilitation Monday after entering the Japanese equivalent of bankruptcy protection in January 2010.
What! I cannot believe what I am reading

Surely tourism to Japan is zip at this moment .

I am unsure why but Jap tourists to Hawaii are also down as I recall.

Then there is the little issue of fuel price increases .


http://www.marketwatch.com/story/jal...day-2011-03-24
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Old 03-26-2011, 11:03 PM   #23
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I find it hard to believe that Japan isn't screwed six ways to Sunday.....

I shipped my first big sale to Tokyo last week by slow boat. It arrives in about 1 month. We gave the client every opportunity to back out at the last moment, but he insisted on delivery (about $80K product).

I had planned to fly to Tokyo after it arrived to ensure customer satisfaction, but that's probably a non starter at this point.
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Old 03-27-2011, 02:47 AM   #24
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IMO the most interesting issue is Jap Government debt .

I believe over the past decade banks have been lending to government
( buying bonds ) as an alternative because the private sector has been
reducing their borrowings .

Japan has survived with such a high Govt. debt load because government
spending was roughly equal to private sector savings .

Now however the private sector must draw down savings
and also borrow . Meaning that banks may stop financing
govt. debt and there will be many new pressures on the pool of
available capital .

Furthermore the private sector previously had limited borrowing
opportunities without taking on foreign exchange risk .
Now investing in Japan may be more risky than investing
elsewhere as the Yen is likely to depreciate against overseas
currencies ( eventually ) .

We also have the prospect of depleted foreign currency earnings.
As the crisis unfolded there was apparently a massive sell down
of assets held overseas by Japanese entities with a corresponding
repatriation of capital that temporarily drove up the Yen .

So now all that capital is at home and not earning foreign
dividends . To cap it off there will also probably be significantly
reduced exports ( power shortages , no tourism etc ) .

In Summary .
As in all democracies leaders are gutless when it comes
to harsh economic measures and facing a crisis
caused by shortage of capital they will print money in
bulk .

So to re-state the blindingly obvious ..
Short selling the Yen seems to be a reasonable bet .
The danger is that the current level has been driven
down by BOJ selling which may not be sustained .
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Old 03-27-2011, 05:25 AM   #25
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I shipped my first big sale to Tokyo last week by slow boat. It arrives in about 1 month. We gave the client every opportunity to back out at the last moment, but he insisted on delivery (about $80K product).
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.
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