Tag Archives: national consumption

Amateur Hour at TEPCO

2 Sep

Amateur Hour at TEPCO

Well here we are 2 years and 6 months later. The government as well as parts of TEPCO management have changed but the excuses haven’t. Their press conferences are frighteningly puerile with the media hardly reporting on it at all. There is a reason why the Fukushima problem is not being reported to a large degree in the domestic market but it does not change the facts of the ongoing situation here in Japan.

I am not surprised, are you ?

It has been widely reported on the net and from foreign news sources that TEPCO built almost 1,000 tanks to store tons of contaminated water. Yet they did not test the valves or sealant in the tanks. Further these same tanks do not have water pressure gauges either. Then for an added bonus the company said that a total of two workers are responsible for checking the tanks. Huh ?

I have a question.

Is TEPCO serious ? They must be joking right ?

The plan was to build tanks, fill them with radioactive water without testing the sealant, not to install pressure gauges, then to reduce monitoring to a minimum ? Sounds like a winning plan to me.

Who is asking about these issues in the press ? Wait don’t answer that because I am sure the excuses will be worse than the “plan” TEPCO instituted. I get that nobody wants the job; its dirty, its dangerous, its unpopular and perhaps most compellingly its taboo.

Yup thats right folks. Talking about Fukushima is taboo.

If you think about this cultural safety valve it does help put many of the other issues into better focus. War crimes ? Taboo. Historical trouble in the region and the causes of them ? Taboo too. It really does bring up an image of an ostrich with its head in the sand. Problem ? What problem ? I don’t know about any problems.
I recently tried to discuss this issue with a long time expat friend of mine that I have known for over 10 years. He seemed incapable of understanding my point that how others perceive Japan is just as important as what Japan does going forward. It became so frustrating that I gave up trying to make the point. Perhaps I shouldn’t have but if one factors in the taboo, it makes perfect sense.

After realizing this point and spending the mental downtime to better understand it I think I can better appreciate the Japanese. They want to do well, and they try their best to do things right and if they get it wrong nobody talks about it. Its a very effective method for moving forward.

Sadly by brushing everything sordid, distasteful or dirty under the carpet there are bound to be bugs and disturbances that come about as a result. So remember that round these parts its best not to talk about past mistakes.

Is that how you live your life ? Wow talk about ghosts in the closet !

As a teacher I sometimes tell students that the best way to learn is to make mistakes, yet many diligent students here do not want to take the risk of making a mistake. The system here teaches that by venturing no answer or opinion and waiting, the teacher or senior will eventually provide the answers.

I don’t think the Western methodologies of peer based guessing are any better, just different. If I had to explain it I would use the coin analogy. Both sides are effective and one does not serve a more important function than another. I suppose I should post something about teaching on the blog but the political and environmental situation just get stuck in my craw and I want to purge the gestalt.

Meanwhile Shinzo Abe left on a nuclear technology export road show to the Middle east and Africa this week visiting Bahrain, Dijbouti, Kuwait and Qatar. Japan has already signed a nuclear cooperation agreement with UAE.

Business as usual I suppose. That other stuff belongs under the carpet.

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Prices are up

14 Apr

Its been awhile since I last posted but as anticipated the prices of many things here in Japan are up. Tonight the news mentioned that high end rings and jewelry are going up 10%. Meanwhile prices for food are up too as this country imports about 60% of its total caloric intake from overseas. Gas prices are up as well.

Meanwhile the Yen continues to weaken, hopefully to spur sagging exports but somehow I doubt that the Koreans who quite likely are in the same export market segments as the Japanese will sit idly by while Shinzo Abe follows his policy of further QE.

I still cannot understand why people vote to support a man who openly talks about inflation. This is in a country where it costs you $6.50 just to sit in a taxicab. However a closer look at the situation reveals why the LDP has taken power. In a word “redistricting”. The political lines in Japan have remained the same for quite some time. In fact I don’t know how long it has been since the country adjusted them but as it currently stands the educated city dweller has very little representation while the rapidly depopulating rural areas continue to send large numbers of representatives to Tokyo where they vote in large numbers to support LDP infrastructure projects. Knowing how things work helps to better understand why Shinzo Abe can openly say that a 2% inflation rate is his party’s goal.

The way I see it things are not going to get better for the average consumer and the elderly are going to be in for a shock at the supermarkets. On the other hand large corporate bonuses were paid this year so ideally the lucky recipients will spend the money boosting demand. I am not holding my breath however.

Best of luck to the PM and the LDP. They are going to need it.

Mr Abe still going strong

8 Mar

I had some free time this afternoon while eating an early dinner so decided to turn on NHK and watch the Japanese government discuss current business. There was quite a lot of talk about TPP aka free trade and while I have quite a few opinions about Japan and free trade I wanted to take the time this evening to mention that Prime Minister Shizo Abe looked very healthy and enthusiastic. He had color in his face and a stride to his step. He jumped up nimbly to answer more than a few questions.

Now this doesn’t necessarily mean anything but from a guy who has been watching the PM closely since his election, Mr Abe does not show any signs of wearing down or losing his verve. I wonder how long he can continue to fire on all cylinders ?

As far as Japan and free trade goes I will post something about it in the near future. For now Mr Abe is looking genki and still has a majority of public support. His numbers are holding north of 60% and his financial policies continue to hold sway.

March 15 is tax day here so it could be quite interesting to see how the year end accounting is reported.

Prices are up ?

24 Feb

Since the LDP swept back into power the Abe government has proudly and often stated that their goal is to increase inflation. As to why the public at large would actually vote for such a proposal is somewhat disheartening and is probably more closely related in a desire to change government from the NDP rather than support for the LDP. Among the people I have talked with, many of them have expressed a desire to do something which is in itself holds some merit. For those of you who don’t quite understand the Japanese mindset, the choice between doing nothing versus something here often results in doing nothing. A lot of time, attention and money is spent in meetings discussing things that are never done, so the fact that people are telling me that they WANT change and WANT something to happen is a leading indicator of more “news” to come.

Perhaps had the general voting public better understood what the Abe government wanted they might have opted for the do nothing approach. In an effort to boost exports the yen has dropped quite significantly. Yet trade has not improved published numbers show an across the board dip in exports. Perhaps that is somewhat attributable to China being approximately 20% of Japan’s market while the Abe government talks tough on the disputed islands. Once again a clear foreign policy failure by the Japanese government who has shored up its domestic support with “China is the problem” comments at the expense of its corporate overseas earnings. I suppose we should wait another quarter or two to see how things transpire but I am not hopeful that things will change.

The drop in the yen’s strength dovetails nicely with an increase in the Japanese governments buying of US debt. So perhaps with tacit agreement by the US, Japan has devalued the yen in an effort to boost sales. We will see soon enough if this is a winning formula. I believe it is perhaps short term “winning” tactic but a long term losing strategy. Japan has not addressed its core issues going forward and is simply creating more debt in the public sector. Further with March 15 tax day approaching, many of the government programs will expire. For example if one wants to buy a “light” car and you want to take advantage of some government support, you need to purchase your car prior to March 15. Last time I checked I heard that qualified candidates might get up to about 800 bucks back on a new car. Cash for clunkers anyone ?

Actually my wife and I will be buying a new light car in the next few weeks so I will try and post something about the experience.

With the yen dropping in value, import prices are rising. Bananas, Gasoline, Meat are all already up in price or scheduled to rise. Yay, your average blue collar family now has less money to spend on education, paying off loans etc. Meanwhile the alleged export boost has failed to materialize. I can’t say how long it will take for the voting public to recognize that they have voted against their own best interests but if the pattern holds true I would say by August or Christmas at latest Mr Abe will start feeling the pressure to announce elections.

Now is the time for him to act. I believe he is going to get the BOJ and finance department changes he wants, further weakening the yen. He has been open in his declarations about the LDP plan so far and he knows better than anyone that his support will fall off going forward. He has to move forward with the LDP blueprint and hope that it shows results.

What has me scratching my head is how inflation among the things the general public consumes is going to benefit the Japanese people. Prices are still too high here and that is after 20 years of deflation. I am certainly not wishing the LDP ill will as my adopted country needs to change course but I honestly don’t believe that Abe’s decisions are best for the Japanese people. Maybe I will be proved wrong, but I doubt it.

Forecast is for stormy skies ahead

5 Feb

Sad to say that it appears things are looking worse round these parts.

TEPCO has received an additional 700,000,000,000 in yen for their Fukushima compensation fund putting the total available at 3,240,000,000,000 yen. Yes that’s 3 trillion yen folks. The monies are to be spent on projects and other expenses related to the nuclear meltdown and are already being poached by the criminal elements in society.

Decontamination crews have had their wages cut or withheld by employers out to milk the system. I would rather not get into the ugly details about what “decontamination” means here but simply put persons using a dirty rag to wipe off a roof tile are part of the solution. Further there isn’t a place to keep the dirty soil so it is put in garbage bags and piled up wherever they can find space. I guess its the heftybag solution to nuclear fallout.

I just read that a toxic smog from China is now floating over Japan. Its not surprising that this would occur due to the following facts;

1. China puts a new coal fired power plant online every 3 weeks and will do so for the next 20 years
2. The quality of China’s coal is marginal and has a very dirty burn resulting in a high particulate rate
3. During Winter the winds blow from the West to the East, thus Japan is downwind from China

People are being cautioned about going outside, especially the young and old. its interesting as many schools have just completed their mandatory student marathon class. Perhaps the air was unhealthy then as well ? I don’t know for sure but it wouldn’t surprise me in the least if it was.

Its hardly scientific but a number of people in my neighborhood have all experienced nausea, vomiting and severe headaches over the past week or so. Perhaps there isn’t a correlation but then again…

Our local newspapers here are now reporting that Mount Fuji has increased pressure. The mountain is starting to vent gas along the NE side. Lakes near the base of the mountain also have heightened water levels of about 1 meter. The entire area is a subduction zone with Suruga Bay pushing under Fuji like an escalator. My neighbor mentioned Fuji acts like a clock erupting every 300 years. The last eruption was 1707.

So its good news all around !

The Abe government continues to devalue the yen so as a result prices are starting to climb at the retail level. Perhaps I have mentioned some of this news before but I thought it prudent to post it in case I hadn’t.

Anyway today we are off the wholesale food shop and to kick the tires at a local car dealer. With some luck we will get a credit approval for a rock bottom low rate on a car loan. Lock in a fixed rate and smile all the way to the bank if and when the Yen hits 150.

End of January Update

31 Jan

Its been too long since I paid attention to this blog so I thought I would post some humble musings for my dear readers.

The Yen has continued its weakening and is now sitting around the 90-91 level. While from outside the country this might be worth a read in the business section or a few thoughts about how one might make some money I have to tell you that it is starting to affect things here. Gasoline prices are about to go up about 2 yen per liter, granted its not a significant change but it is what I believe to be the first in a serious of gradual price rises as the Abe government continues to devalue the Yen.

A very good indicator are food prices. In a country that imports approximately 60% of its caloric intake a weakened yen translates directly to higher prices at the supermarket. Since it is also fairly well known the supermarket margins are razor thin the company has little choice but to pass on the increased costs to its customers. Portion sizes will decrease and prices will continue upwards as long as the Yen continues to devalue. Bananas in particular which are primarily imported from the Philippines are an excellent way to check the relative strength of the Yen. The prices have already started moving higher and the number of them on the bunch are also fewer that before.

Here in town a number of supermarkets that had been in business for decades have closed. Most have reopened under new management but I suspect the number of players in the marketplace have been reduced although I have no proof at the time of this writing that this is in fact the case. Fewer players in the supermarket space will result in less choice for the consumer and additionally put more pressure upon those choosing to service the community under greater pressure not to raise prices without just cause. In my opinion its a very ugly situation that is bound to get worse.

There are other disturbing trends as well. Recently a rich money fund operator was murdered outside Tokyo. He and his wife had led a very handsome lifestyle based out of Switzerland but had returned to Tokyo for some reason or another only to find themselves killed and dumped in a shallow grave outside town. I suspect and have no proof whatsoever that this was in fact a Ponzi scheme operator who had pissed off the wrong investors. The fund had purportedly showed very high returns which in itself is a highly significant story as Japan has had 20 years of deflation. How could this couple show such great returns for so long ? After the economic crisis or what is referred to here as the Lehman shock I suspect they could not access further derivative credit and were forced to return to find new investors. When confronted for a return they could not provide it and were then killed. In classic Japanese manner the alleged murderer tried to drink some kind of toilet cleaner to off himself but failed and is now in custody. The police found him because he was the owner of the land where they found the buried bodies. Seriously you cannot make this stuff up.

The Abe government continues to say their target is an inflationary environment despite the fact that it will adversely affect many of the people who voted for them. Support levels are in the 64-66% range for now. I am fairly certain that by March 15 which is tax day here in Japan we will see the implementation of the national consumption tax rate hike to 10% up from the previous 5%. This will in fact spur a frenzy of buying as folks look to try and maximize their spending capital which the Abe government will turn around and point to as a sign of improvement. Of course it is relatively safe to assume that come the Summertime and demand has fallen off to its previous low points and with the Yen further weakened, higher prices at the gas pump and at the supermarket we will see Mr Abe’s support levels dropping well below 50%.

Its at the point we will find out exactly what kind of politician he is. I for one am looking forward to it.

Yen weakening

15 Jan

I posted some time ago that Abe’s position was mostly about hope. I thought that he was going to pay mostly lip service and it would be business as usual, but it appears I was wrong. I wonder how long the hope will last ?

Well as of right now the Yen has “weakened” to 89 to the dollar. With the Yen moving back towards making exports profitable again it appears the government can buy themselves more time before ultimately falling to the quadrillion yen debt they have built up over the decades. I have read that Zaibatsu want to reach a 106-08 range to pad their profits enough to go back to business as usual. If Abe continues to have his way perhaps we will see the magical 100 yen rate hit perhaps by March ? Its going to be interesting to see how things pan out now that Obama is back in the saddle after a long campaign season. My bet is on dollar rally until washington gets its act together and further devalues…

The market in Tokyo is up too. The Nikkei hit its highest level since April 2010. I think the question everyone is asking is “Are we seeing a new normal or is this just noise in an otherwise very dim market going forward ?” My guess is the later but I suppose the title of this blog would indicate that I am bearish on things.

Turn on the “new” nukes

6 Jan

The news is a few days old but its official. Prime Minister Shinzo Abe has done on national TV and clearly stated that he supports the building of “new” atomic reactors.

He clarified his position by stating that the new nuclear power plants would be improved and that his government should build energy trust with the Japanese public.

http://enenews.com/prime-minister-japan-will-be-building-nuclear-power-plants/comment-page-1

Its a very unpopular position to take as the Fukushima crisis, poorly attempted coverup and criminal neglect has soured the population against nuclear power. Japan does not have any real energy sources and must import it from places such as Indonesia, Russia and Australia.

The nuclear special interest groups bring deep pockets, jobs programs and provide energy for Japans consumers so in the long run it was only a question of time before the atomic power door was opened. Still it should immediately reduce Mr Abe’s support numbers nationwide and bring opposition parties closer together in an effort to oust the LDP from power asap.

In the past Mr Abe has been very vague about many of his positions so for picking up the atomic energy baton and waving the flag this humble blogger can at least understand and support his decision. He actually visited the Fukushima power plant on December 29 and quite likely got a full dose of how “safe” it is now that things have been “cleaned” up.

Now if he can only speak more carefully about foreign policy things might cool down. Recently he has gone public with his wish to “reframe” Japan’s post WW2 apology. The East Asian regional powderkeg simply exploded with reactions. The Koreans in particular have a strong and deep feeling of resentment about the entire issue and it is my understanding that Japanese textbooks do not fully or accurately depict the occupation which further angers the Korean people. The Chinese too who always appear eager to point fingers elsewhere were quick to condemn the statement.

Why is Mr Abe even discussing this ? Its a losing strategy on the international front and his rural and nationalist supporters in Japan are already onboard with his election. It makes little sense and is another confirming indicator that he is flawed leader.

So in the past week Mr Abe has stirred the atomic energy hornets nest, which was more of a required move to take and at the same time has opened a giant can of worms in the region with his “forward” working statement as regards East Asia.

Can’t wait to see what next week brings.

Debt, lovely debt

5 Jan

Today I wanted to discuss the financial situation here in Japan. There are a number of commentators who watch the market and economic conditions here but perhaps my favorite person to listen to is Kyle Bass. The other day I watched a Bass video via Zero Hedge and youtube that featured Kyle saying that the sky would fall and it was a question when it would happen.

He mentions a few pertinent facts;
1. Japan pays 10.5 trillion yen a year interest on their national debt
2. Japan takes in 40-42 trillion yen a year in tax revenue
3. Japan pays almost zero interest to finance their debt

It doesn’t take a rocket scientist to figure out what happens next.

Japan already pays 25% of its total annual tax revenue to service its massive quadrillion yen debt. How much more debt can they possibly sustain ? Its even more disturbing when you consider that very few politicians are talking about paying off this debt. The path is very dark ahead…

Prime Minister Shinzo Abe is already on record saying that rural infrastructure projects are needed. Obviously the money has to come from somewhere. Financial minister Taro Aso has also gone on record saying that government spending and financial “easing” must continue if Japan is to achieve its 2% inflation goal and keep its unemployment levels in the 5-6% range.

Stay tuned

My guess is that Mr Abe cannot finish the job but Mr Aso will take over before the years end.

LDP singing the same old tune

22 Dec

LDP singing the same old tune

Tonight on NHK news there was a round table interview of an LDP representative. There were a series of questions about the nation of Japan and the LDP’s plan for the future.

If you wade through the obfuscation the answers were very simple.

The LDP is going to borrow large amounts of new debt to fuel major construction projects across the country. Earlier this week the new Prime Minister Shinzo Abe had a meeting with the Bank of Japan Governor Masaaki Shirakawa. Shirakawa has an M.A in economics from the university of Chicago and is a DPJ approved nominee who was appointed by LDP prime minister Fukuda. At the time the DPJ controlled the upper house of parliament and kept the BOJ position open for 3 weeks which was a major gaffe and the first time since WW2 that Japan hadn’t had a bank governor.

Mr Shirakawa is most likely going to be replaced as soon as the LDP can muster the time and effort to do so. As a result of what will probably be Shirakawa’s pink slip and the BOJ awaiting its marching orders Abe did most of the talking. The BOJ will fall into the LDP line of promoting inflation, deregulation and economic growth. It then delivered another round of stimulus which has become rather SOP in Japan these days. It will also stand ready to open the spigots of further monetary easing early next year.

The LDP is going to begin construction of new nuclear power plants. This was an easy issue to see through as its only a question of time before the government begins to pressure the various prefectures to turn on their idle power plants. This flies in the face of what appears to be public sentiment, however this blogger feels that Japan is really in a difficult position when it comes to energy consumption. The main obstacle for the LDP to overcome is policy wonk insistence that active faults lie beneath nuclear power plants all across the country. So there will be a gradual insistence from the top that “things are fine” or if they are not “we can restructure things so they will be fine”. Thus overcoming DPJ policy that led to almost every plant closing as they phased in their usual maintenance programs.

How will the younger educated urban people feel about this ? It should be very interesting to see how things shake out going forward. I am hoping it gets testy as it is very unlike Japanese to cause others to lose face. After the Fukushima fiasco, lies and criminal mismanagement I doubt the public will approve of the LDP’s decision. Changes will start brewing shortly after the LDP forces through the policy. It is probably the right decision in the long run but as usual the party doesn’t rule by consensus but rather by edict. It will most likely be their undoing.

Further indicators include the appointment of LDP policy chief Akira Amari as minister in charge of the economic revival. Amari is a well known pro nuke guy. Amari will head the Council on Economic and Fiscal policy which the LDP will use to pass further regulation measures. In a country where regulation is paramount I for one am looking forward to how things will turn out. Will Amari be up for the task ? At 63 years old I would say the jury is still out but I wouldn’t bet on him staying too long.

It appears that Mr Aso who is himself a former Prime Minster will be put in charge of the ministry of Finance as well as becoming deputy prime minister. This blog has a rather negative spin on Japanese politics but I do hold hope for Mr Aso. He is quite capable and unlike Abe knows how to lead. Further posts appear to be held for Mr Tanigaki and Ishihara. Ishihara is a firebrand nationalist politician who has a lot of support from the Japanese conservatives because he speaks his mind and supports popular positions on among other things the Senkaku islands that I wrote about earlier in this blog.

Look for Mr Abe to focus on economics first, and then trying to fix the numerous other issues facing this country. He may quite possibly try and reform the constitution which will have a very interesting affect on the regional powers who carefully watch the Japanese. The last time Mr Abe was in office, his term was most known for a series of scandals, outrage and mismanagement leading to his leaving office and eventually the DPJ taking power.

With 40% of seats in parliament being controlled by the urban voting block I believe that Abe can keep the pork machine doling out enough jobs to keep the rural 60% of seat holders economically satisfied. I think that ultimately the major factor will be if something non economic gets in the way of the LDP’s deregulation and constitutional plans for change.