Tuesday, October 28, 2008

Charge now and pay (much) later

if ever. Business Week has opinion on the financial crisis which, like R. Taggart Murphy below, suggests the past (?) idea of the US being able to drive the world economy by borrowing money from other countries to purchase those countries' goods and services may be gone for good:

...there's good reason to believe that the current crisis reflects a growing realization: Long accepted patterns of cross-border technological transfer, foreign trade, and global finance are simply not sustainable...

...This [system] worked as long as everyone believed that American consumers could finance their debt. But here's the problem: At the same time Americans were borrowing, their real wages were falling—and not just for the least educated. By BusinessWeek's calculations, real weekly earnings for college grads without an advanced degree have dropped every year since 2002.

You can't pay back rising debt with falling wages; something had to give....the entire global edifice was built on an impossibility. Full article here.

The house of cards has fallen and people are starting to take notice. What will Japan do if it cannot base its economy on exports to the US (or manufacturing goods exports to China so that they may export to the US) to the same degree that it has been doing for decades? And what will the US do if we have to stop relying on borrowing and have to raise taxes or cut spending (and rely less on individual credit as an income supplement/substitute) to make up some of the difference.

I am not holding my breath waiting for Aso, Obama, or maybe McCain to explain exactly how they plan to deal with this new reality.

Monday, October 27, 2008

Asia as enabler of an alcoholic US

R. Taggart Murphy has posted another article on Japan Focus concerning US indebtedness to foreign countries, most especially those in Asia with export-led economies (Japan and China are the top two):

...Like an alcoholic’s wife who furtively keeps her husband plied with booze while managing to avoid thinking about exactly what she is doing, Asia has long facilitated the U.S. addiction to drowning its problems in endless dollar cocktails. But the current crisis suggests that the days of cirrhosis of the American liver and delirium tremens are upon us. Without a clear grasp of the ways in which Asia’s economic methods have facilitated American political pathologies, without a plan to replace Asia’s reflexive reliance on exports to the United States with another economic driver, Asia too will be drawn into the economic and political maelstrom that now engulfs Washington...

Murphy predicts an end to the US being the world's engine for demand and the export-led growth (and dollar-reserve accumulation) of countries such as Japan.

Of all the huge changes which seem likely to come, there are few politicians (U.S. presidential candidates in particular) publicly speaking of them, nor is the media pressing anyone about it. In the US, the media has recently been more concerned with such serious issues as Palin's wardrobe costs. In Japan, Aso's choice of bars and restaurants is a similar priority.

Saturday, October 25, 2008

Thank god

For a while there, I was beginning to think I was all alone:

Over a summer dinner, a Japanese colleague shook his head at the yet unsolved gunshot murders of three supermarket clerks in Hachioji in 1995.

"It had to be a foreigner that did it. No Japanese would commit a crime like that."

"Hello?" I knocked on the table. "Look at me, please." Was not his dinner mate a foreigner too? And might not foreigners be offended by such an indictment?

The man squirmed and said he meant to emphasize the "gun." Japanese crooks would never be so cruel as to shoot people in the back of the head with a gun.

Right. They might ram a car into a crowd and then knife everyone in sight, a la the killing spree in Akihabara this year. Or like child-abductor Tsutomu Miyazaki, they might drink their victims' blood*...Thomas Dillon in the Japan Times.

Live in Japan? Don't you know exactly how Thomas felt? Have you not been in the exact same conversation yourself?

Just as I have been trying ignore this kind of "thinking" and live in a fantasy world Japan where it doesn't exist... Some do, why not me too?

*There was also the fellow who used a shotgun to commit mass murder earlier this year, but perhaps that doesn't count since he did not simply shoot his victims in the back of the head.

Friday, October 24, 2008

Another unique feature gone

Writer's block. Usually that's because folks have nothing to write about, but I have so much that I want to write about that I can't. So, I will keep it somewhat short and simple. Maybe.

Back in the early 90s when I first lived in Japan (91-93), the Bubble had collapsed. It actually collapsed in 89, but the effects didn't really hit hard until about 92 as far as I could tell in Toyama and later Tokyo. In 1992, the US presidential campaign between Old Man Bush, Slick Willy, and Crazy Man Ross Pea-rot was in full swing. Willy was running around lying as always and claiming the the US economy was the worst since the Depression. Crazy Ross was saying similar things when he wasn't ranting about Bush and conspiracy theories.

I thought that most Japanese believed the "worst economy" bullpucky. I don't know how many times I heard about or was asked about the end of the "American Dream." I for one could never really define what that was so I could not answer, but most non-US folks seemed to know what it was. Perhaps they read it in the New York Times, which is the newspaper that everyone in the US goes to when they want to know what is really going on. (AHAHAHAHA. That is a joke, of course. The NYT impresses only the NYT and certain gullible foreigners.*)

I was watching PBS and the Jim Lehrer Show when it was mentioned that one of the rather stupid things that went wrong in the financial crisis in the US is that people seemed to assume that real estate values would only go up and never drop. That included folks like Alan Greenspan according to the talking head experts.

That took me back to about 1992 when I was hearing reports on TV and reading in the news that many Japanese had thought the same thing about Japanese real estate prices. I thought "How foolish. Of course real estate prices can drop. How could anyone believe otherwise?"

Now I have found that the foolishness is not limited to any one country, even Japan as uniquely unique as it is supposed to be.

残念ですね。(Zannen desu ne. My chance to throw in an unnecessary Japanese word/phrase to impress the hell out of myself and make reading anything I write even more difficult to understand and follow than it already is. Done since I have read that Latin is said to be making a comeback in the States. Ever tried to read an E.H. Norman book? I did in college. Get out your Latin Dictionary while wondering what the hell the purpose of the Latin was. Did he not know English? But I digress as usual.)

(Added 28 Oct) *Folks who read the Times and believe that from doing so, they understand the US. I meet many people like this. It's hard enough to understand a country when you've lived in it for years, let alone have anything other than a very shallow caricature of it from reading newspaper articles from afar.

Thursday, October 23, 2008

Ginza Kabuki-za Theater to be demolished

The famous theater in Ginza is to be razed for a new office-theater complex in 2010.

We've gone to that theater numerous times over the years, and although I am not a rabid Kabuki fan, it was always an enjoyable experience. More than that, the building itself has been an icon.

I once read somewhere that the Japanese like old traditions, but not old things. Like about everything else, that is a gross oversimplification, but I do sense a ring of truth to it. Not that the public would have much effective say one way or another...

Kabuki-za Theatre boasts a history of nearly 120 years, as the original wooden structure was built on the same site in 1889. Since then, the theater has been the center of the kabuki world...

...The government has also designated the building as a "Registered Tangible Cultural Property" of the nation, although such classification does not prohibit dismantling or remodeling...
Japan Times

Tuesday, October 21, 2008


"Daggers" of over 5.5 cm are now illegal in Japan. This will make society safer than before.*

Murder suspect Kazuyoshi Miura, who apparently committed suicide in LA a few weeks ago, may have been the victim of a homicide according to a pathologist hired by his attorney. No motive for the supposed murder has been suggested by the lawyer, but if we wait, he will make one up---oops, I mean discover one. I hope this lawyer has some real evidence behind his claims, but the only surprise would have been if the pathologist whom he hired had found no evidence of foul play and had agreed with the LA coroner that it was a suicide.

*Or not. A bill banning them has passed, but it has not become law yet. The danger remains!!!!

Friday, October 17, 2008

MangaMan explains why the markets dropped Thursday

Japanese Prime Minister Taro Aso said Thursday the U.S. bank bailout is "insufficient" and is contributing to the renewed plunge in global stock markets.

"Since it was insufficient, the market is again falling sharply," Aso told lawmakers at the upper house budget committee in parliament. The committee was wrapping up talks on a supplementary budget aimed to help struggling small- and mid-sized firms amid an economic downturn. AP

There it is. Simple as that. MangaMan did not do the US the favor of explaining exactly what needs to be done as he had to hurry off to the comic book store.

Strangely, some fools in the US and elsewhere who may actually have some clue of what they are talking about have said that since banks are charging each other less for overnight loans that it indicates some easing of the credit crisis. Other imbeciles are saying that the most recent volitility is due to recession fears. All of these goofballs would be wrong. MangaMan knows the deal.

Thursday, October 16, 2008

(Baka) Semi-Gaijin

Now we know the answer to the earlier confusion: He's a (baka)semi-gaijin.

Nobel laureate in physics Yoichiro Nambu will be listed as an American in public documents to be issued by the Japanese government, while his award-winning research will be recognized to have been achieved as a Japanese national, the government has announced.

The Ministry of Education, Culture, Sports, Science and Technology has come up with the unusual measures as Nambu, 87, is a Tokyo-born American citizen. It is the first time that a Japanese of foreign nationality has won the prize. Mainichi


"We must take the lead in setting up a way to buy up the world's risky assets. A major motive is that we can help the U.S. and the world economies," ruling party lawmaker Kotaro Tamura said on his Web page. "It's a big chance for us to have the U.S. grateful and indebted to us."

...But Jochen Legewie, a Japan expert and president of German communications consultancy CNC Japan, expressed skepticism that Tokyo could capitalize on the West's need for help.

For years, Japan gave aid to poor nations and never got much credit, he said. The West has tended to view Japan as a fat wallet with little to assert on policy, scoffing at Tokyo for "checkbook diplomacy." Japan Times

Tuesday, October 14, 2008

Because he is Japanese?

As there are some much, much more important things going on in the world right now (which seems to have mostly escaped many people---both Japanese and not---whom I know) I haven't been focusing on the small little irritants recently.

However, my Japanese teacher who insists on spending the first hour of a two hour lesson on chatting* often gets me back to thinking of such things. A few weeks ago while wasting time BS-ing, she told me about a bicycle accident that she had recently been in. Seems it was raining and the normal, everyday mami-chari-riding head-up-the-keister salaryman came around a curve on the wrong side of the road with his umbrella in front of his face so that he could not see and ran into her injuring her wrist.

I didn't see anything unusual about this as it is the common, everyday way of riding. In fact, had he not come around the curve on the wrong side of the road with an umbrella blocking his forward vision, then I would have been shocked. Her story was only surprising because a just few weeks earlier I had mentioned how dangerous it was to ride a bicycle with people not paying any attention to where they were going, wobbling from side-to-side, and basically riding brain dead. She acknowledged this and said she was guilty of it herself, but seemed to see nothing especially wrong with it.

Except for her injury, I viewed this as a non-event, just an average day around mama-chari riders. I ask her one question, and that was "What did he say?" She replied "I'm sorry." THAT WAS A SHOCK!!!! I ride thousands of miles per year and have been in several accidents. I have found that it is EXTREMELY rare that any mama-chari rider will apologize for causing an accident.

I then told her about one of the accidents that I had where a guy jumped into his van, and without pausing to look, backed out directly in front of me. Fortunately I had seen him and identified him as a likely idiot and had hit the brakes and was able to slow quickly, but still had to swerve and hit gravel and crashed. As I was picking my bloody, road-rashed self up off the pavement, he rolled his window down about an inch and looked at me. Then he backed the rest of the way out and took off down the road. (Of the dozens who had seen the accident, nobody offered any assistance.)

She giggled when I told her about him taking off with no apology , no offer to help, and no show of concern. and said "Because he is Japanese!" I left it there as I knew what she meant and I have heard many Japanese say similar things. She didn't mean it is something genetic, or something that everyone does. But some people seem to find that sort of thing as pretty unsurprising.

Gee, wonder why that would be in the land of perfect politeness and where everyone obeys the rules?

I actually want to focus on improving reading skills/comprehension not on shooting the shit which I can already do. I can't complain much as I got her off the JPLT 1 test material for reading and into some actual materials that one could find some reason to read. Hell will be mighty frigid before I take another JPLT test anyway.
With one of the biggest crisis's in at least the last 20-30 years, and with the US and much of the world likely to change in very significant ways over the next several years, it is tough to come up with something to post that is not comparatively trivial.

MTC, however, has a good post on Shisaku. This one concerns the earlier Japanese (and more recently, Chinese) policy of keeping their currencies artificially low vs the dollar, the building of huge currency reserves---often loaned back to the US---and how this has contributed to the current crisis and that it may effect a bigger change on Japan and Asia than many seem to realize.

I think that this is just the tip of the iceberg. Perhaps I am over reacting....
With so many things that have happened over the last few weeks---so many world changing things---it's hard to pay much attention on the more trivial irritants.

On the weekend that Lehman Brothers failed and Merrill Lynch was sold, I thought that this was a history making event; one that will be in the history books for decades. I thought it was the beginning of a new era.

However, I don't seem to sense that same feeling in most whom I know. The only folks who seem to have any concerns about it are a few guys who are in higher positions in financial/financial-related companies. Others in those same companies seem to view it as mostly a US problem with some possible affects on Japan.

Just last week one guy mentioned how he thought recent events indicate that Japan and the US have again reached opposite ends of what he called a "cycle" where Japan will be at the top just like it was in the 1980s. I never bothered to ask how he thought Japan could achieve that if the US could no longer borrow money to pay for Japanese and other imports.

Friday, October 10, 2008

Finally, I can type again as my new keyboard arrived (and not without the usual trouble) this evening. As I watch the markets continue to tumble worldwide, I may need it to type out a suicide note. That may be more likely if I listen to the US election coverage and watch John McCain quickly go completely nuts. And if I listen to the LDP in Japan---which on the 7pm NHK news tonight had an old, old, politician (LDP?) talk about how any election should be delayed to keep the Japanese people from worrying about the economy*---I will not even bother with a suicide note.

I am kinda hoping to actually be able to vote though if the state of Washington could be bothered to send my ballot sometime before the end of the decade. Obama has basically won by default. He has pretty much kept his mouth shut as McCain has gone insane and has started running around like a rabid baboon with a hornet up his ass. Reminds me of the last crazy man we had running, Ross Perot.

*I listened to the simultaneous translation broadcast. The statement is the translator's version of what he said.

Wednesday, October 08, 2008

(Baka)Gaijin or not?

While watching the news on TV last night (forget which station), I learned that three "Japanese" had won a Nobel prize and watched the excited reactions of people when informed during the usual goofy "man-in-the-street" interviews.

Then this morning I read:

An American and two Japanese physicists won the 2008 Nobel Prize in Physics today...(Washington Post)


Two Japanese and an American have won the 2008 Nobel Prize for discoveries in the world of subatomic physics...(Japan Times).

Oh. Maybe they meant ethnicity.

Tuesday, October 07, 2008

US military paid for by foreign debt?

In a new Japan Focus article, R. Taggart Murphy* discusses why Japan has not (will not) internationalized the yen.

He also makes the following observation:

...Japan has left its export earnings inside the U.S. banking system, thereby automatically helping to finance American external deficits. Thus Japan has been the primary financial facilitator since the 1970s of the American ability to project military power around the world without crushing domestic tax burdens. While it has been joined in the last decade by China and the petroleum exporters, it is safe to say that the end of Japan’s support for the dollar would mark the end of the American ability to run endless current account deficits and thus its ability to support its vast military establishment...

And we are in paranoid mode about security when we have to borrow from foreign countries to pay for much of our ability to project military power? At least one of our lenders (China) is considered by some to be a potential military opponent. How is that secure?

And since the US values military security over economic security,** this may also help explain a lot in US/Japan relations.

*Murphy has written good two excellent books about Japan's 1989-early 2000s economic problems, including Japan's real estate bubble and the Japanese government's involvement in creating and bursting the bubble: Japan's Policy Trap and The Weight of the Yen.

**This sort of thinking has been criticized since at least the 1980s and the US/Japan trade friction. It can be convincingly argued that the US contributed to peace after WW2 with economic policy much more than military power, although both were important during the Cold War. See Asia, America, and the Transformation of Geopolitics, for example.

Monday, October 06, 2008


Neither McCain nor Obama will be driving the real change that's coming:

...when the U.S. government gets half its borrowings from abroad, at a time when the U.S. household savings rate is hovering around zero and China alone is already holding around $1 trillion in U.S. Treasury notes and Fannie Mae and Freddie Mac bonds...

"The next round of capital that comes in from abroad is going to be much more demanding and move into real assets,” argued Jeffrey Garten, professor of trade and finance at the Yale School of Management. “Being a bigger debtor nation means losing even more of our sovereignty. It means conducting our economic policies with an eye toward whether others approve. It means bearing the advice and criticism that we have dispensed ad nauseam to other countries for over half a century. It means far more intensive consultations with other capitals on our fiscal policies and our monetary policies.”

...Of course, neither Barack Obama nor John McCain dare talk about this now. They want to pretend nothing has really changed...Thomas Friedman, NYT

I very much suspect that there will be much more widespread and deep"change" than this.

It's all the fault of greedy Wall Street types

and everyone else is pure:

...Fannie, a government-sponsored company, had long helped Americans get cheaper home loans by serving as a powerful middleman, buying mortgages from lenders and banks and then holding or reselling them to Wall Street investors...

...Competitors were snatching lucrative parts of its business. *Congress was demanding that Mr. Mudd help steer more loans to low-income borrowers. Lenders were threatening to sell directly to Wall Street unless Fannie bought a bigger chunk of their riskiest loans...

...Disregarding warnings from his managers that lenders were making too many loans that would never be repaid, he steered Fannie into more treacherous corners of the mortgage market...NYT

Naturally Congress did not say how to do it; just to do it.

Added 3:30pm: The appetite for toxic mortgages was fueled by Fannie Mae and Freddie Mac, the super-regulated housing finance companies. [Columbia University's Charles Calomiris] calculates that Fannie and Freddie bought more than a third of the $3 trillion in junk mortgages created during the bubble and that they did so because heavy government oversight obliged them to push money toward marginal home purchasers*. Washington Post (opinion).

(And never spill coffee on your laptop keyboard. It sorta impairs typing.)

7 Oct: *Politics has fully entered now as Rep. Barney Frank calls these claims "racist."