Economy of Japan slips into recession

[tritsofme]

http://www.iht.com/articles/2005/02/16/business/yen.html

TOKYO The Japanese economy slipped into recession last year, as consumer spending weakened and exports stalled, government data showed on Wednesday.

Gross domestic product contracted at an annual pace of 0.5 percent in the fourth quarter, a sharp contrast to the 0.5 percent growth predicted by economists, as inventories of some electronics goods piled up and consumption remained weak despite a rosy job outlook.

Coming a day after a report that the euro-zone economy barely grew in the fourth quarter as the German economy unexpectedly contracted, the Japanese data suggest widening imbalances between the world's biggest economies.

"We did expect global growth to lose momentum; that's not new," said Holger Schmieding, a senior economist at Bank of America in London. "What's new is the imbalance between a strong U.S. and strong China on the one hand and a weak Japan and weak Germany on the other. This is even more pronounced than expected."
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[Chico Man]

1. Kyoto is like a salt in this wound?

Now this is real sacrifice, not the kind Bush talks about.

[applegrove]

2. They all knew that growth in the traditional Western Economies would

slow down. Did your governement warn you? Or did they encourage you to spend, spend, spend and buy houses and shit (you don't want to be in debt when/if deflation starts to happen).

[Flagg]

3. But I thought it was Europe's economy that was lagging the rest of the wor

ld ?


http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1231745&mesg_id=1231745

[tritsofme]

8. Pretty close

growth in eurozone is anemic to non-existant.

Unemployment is very high as well.

The German economy actually retracted in Q4 2004, and if there is not growth this quarter they will be in recession as well.

[Redstone]

4. Hasn't it been like that for years in Japan?

Redstone

[ALago1]

7. I thought the same thing

Japan has been experiencing sluggish growth for sometime now. Even experiencing deflation. I never knew that they climbed out of it.

[Ripley]

5. Doesn't Japan hold the largest chunk of our IOU's?

Maybe they'll call them in. Gulp.

[Psephos]

14. They can't "call them in," because they are fixed-period bonds

They may, OTOH, lose some of their appetite for future bond purchases.

[bpilgrim]

6. they've been flatlined for a decade... looks like decay is setting in

will be all right though, our bombs and bullets will be in huge demand for the foreseeable future according to the Carlyle group and the Rand institute.

peace

[Deja Q]

9. The US economy is 'strong'?!

We're boned.

[cthrumatrix]

10. you didn't get the memo?.....(sarcasm off)

[VegasWolf]

11. Japan was the original outsourcer, in the 70's and early 80's Japan

was a major manufacturer and their economy seemed to know
no bounds. Then they got the brilliant idea the Japan
was the intellectual center of the Asia Pacific Rim and
began farming out their manufacturing jobs to Korea. Korea
then became the powerhouse and Japan has languished to this
day. Japan proved that a service economy fails, you can't
wash my shirt and I wash your pants. A strong manufacturing
base is need at the bottom.

The US collapse should be even more spectacular. The neocons
brilliant strategy of outsourcing jobs, deficit spending
"the deficit does not matter", obscene profits to corporations,
and tax relief for the uber wealthy is guaranteed destruction.

[idlisambar]

12. The GDP figures have a political purpose

I posted this on the other thread on the same topic. Take these numbers with a grain of salt....

Just as the U.S. uses its GDP figures partly to attract foreign investment in the face of massive trade deficits, Japan uses its figures to scare away foreign investors thus keeping its currency undervalued and to reduce political pressure from its trading partners in the face of large trade surpluses. The calculation of GDP/inflation is an art not a science, and subtle but significant differences in measurement conventions can lead to much different results.

[slackmaster]

13. Deja Vu

Reminds me of back in the late '780s- early '80s when Japanese investors were gung-ho about buying commercial real estate in the US. The bottom fell out of that market. Everything is cyclical.

Time for US investors to review their international holdings again.