Japan's economy rebounds in 2Q on export growth

Japan's economy rebounds in 2Q on export growth

www.google.com

TOKYO — Japan's economy broke free of recession in the second quarter, the government said Monday, expanding 3.7 percent at an annual pace on a strong rebound in exports and joining Germany, France and other economies in recovering from the global financial crisis.

(visit the link for the full news article)

Gee... looks like we are coming out of the worst recession in decades!

Looks like Celente is wrong yet again!


The article goes on to say

Government stimulus measures have also helped, such as cash handouts and incentives to buy ecological products — although economists warned that the impact of such measures may peter out.

www.google.com
(visit the link for the full news article)

Uh huh, somebody still has to present a logical reasoned explanation, of how a problem that was created by debt is going to be solved by going into more debt. Once that is explained logically then we will talk about recovery.

Also Japan just pumped a whole lotta coin into their economy, seeing how GDP is also comprised of government spending, the "growth" is false.

Edit to add -

Some other excerpts you forgot to mention.

"When you look at the numbers, the contrast between external demand and internal demand is as clear as night and day," said Hiroshi Watanabe, economist with Daiwa Institute of Research in Tokyo. "With payments falling, it's really hard to expect individual spending to hold up."

Economy and fiscal policy minister Yoshimasa Hayashi warned that "risk factors" remain, including high unemployment and sluggish production.

"Production is still at a low level, and worries remain that employment conditions will worsen. So we must watch the downside risks," he said on nationally televised news.

Private capital investment slid 4.3 percent from the previous quarter, while housing investment plunged 9.5 percent, the government said.

Some recovery.


[edit on 17-8-2009 by Hastobemoretolife]

This is expected, depending on who and what you believe. I just picked up "The Great Depression Ahead" by Harry Dent. Dent has been known to forecast, with extreme accuracy, future economic events using demographic models. A sample reading of his previous books justifies this claim.

His new book, thus far, is telling....almost eerie. The events we are seeing now as just as the previous and more knowledgeable poster indicated...a short run based on the infusion of stimulus. Its smoke and mirrors essentially. We are in the early stages of a depression of the likes our generation cannot begin to understand or relate to. The MSM is doing its job, spewing rhetoric and lies to soften the impact. People are going to brown their pants once this gets going. There will be short term hyper inflation followed by massive deflation in the commodities, real estate and of course stock markets. None of this is ground breaking and I don't want to appear as some economic clairvoyant, the book does that job exceedingly well.

Sorry not to derail this thread just thought Dents input adds to it. I can't help but laugh in the face of those who honestly believe this post is telling and fortunate news.

brill

Short run based on the stimulus? What? Hardly any of the stimulus has been spent. They are saying that any good we are seeing in the economy right now woud have happened regardless and has nothing to do with the stimulus. Most of that money hasnt even been put to use.

Originally posted by brill
The events we are seeing now as just as the previous and more knowledgeable poster indicated...a short run based on the infusion of stimulus. Its smoke and mirrors essentially.

Some times ya gotta spend money to make money. Ask any person who has ever started a business. They go into debt to start the business but then as business grows they become profitable.

Sometimes they even have to take out multiple loans and go deeper into debt to buy time for their business to grow.

Originally posted by Hastobemoretolife
Uh huh, somebody still has to present a logical reasoned explanation, of how a problem that was created by debt is going to be solved by going into more debt. Once that is explained logically then we will talk about recovery.

Also Japan just pumped a whole lotta coin into their economy, seeing how GDP is also comprised of government spending, the "growth" is false.

Edit to add -

Some other excerpts you forgot to mention.

"When you look at the numbers, the contrast between external demand and internal demand is as clear as night and day," said Hiroshi Watanabe, economist with Daiwa Institute of Research in Tokyo. "With payments falling, it's really hard to expect individual spending to hold up."

Economy and fiscal policy minister Yoshimasa Hayashi warned that "risk factors" remain, including high unemployment and sluggish production.

"Production is still at a low level, and worries remain that employment conditions will worsen. So we must watch the downside risks," he said on nationally televised news.

Private capital investment slid 4.3 percent from the previous quarter, while housing investment plunged 9.5 percent, the government said.

Some recovery.


[edit on 17-8-2009 by Hastobemoretolife]

reply to post by princeofpeace


You are correct in the way people start businesses, but if you want to compare this to business, then the right analogy would be a business that has conducted business and has refused to closed its doors even though they have been operating in the red for decades.

The fact is the government has been borrowing money for decades to keep the economy afloat, that is why the National Debt is 11 trillion dollars. What is worth is unfunded obligations are up around the 70 trillion mark.

The economic problem we are facing is a problem caused by debt. You can't borrow your way out of debt. You can try but it is an exercise in futility. Like I said I need a reasonable logical explanation how you can borrow your way out of problem that was caused by too much borrowing in the first place.

Edit to add -

This particular article is about Japan, who went through this thing called the "Lost Decade" growth has been almost stagnate and people don't even know if they will recover from it. We are currently doing the same things that Japan did, but I have a feeling that things are going to get much much worse.

[edit on 17-8-2009 by Hastobemoretolife]

As Paul Krugman has said (I made another thread about it late last week) it looks like the world has avoided the Second Great Depression. This article confirms that in Japan and two European countries, at least, this has become evident. That doesn't mean that anybody is out of the woods yet, just an indicator that the worst may be over. Unemployment may remain high for at least another year, for example.

No economist has a privileged look into the future. They can just estimate based on available evidence. The doomsayers may possibly be right. That's certainly the popular opinion on ATS, but this is, after all, a conspiracy website that thrives on the worst possible scenarios.

As far as how can a country spend it's way out of a depression, I'll try to remind people of a chapter in American history, for ye of little historical memory:

At the beginning of the Great Depression, which began in 1929, Herbert Hoover was president. He did what a lot of people here want to do -- tightened the national belt. Cut back on spending of all kinds and advised the people to save. The effect was an economy that contracted further. No money circulating = a downward spiraling economy. The tent cities that the innumerable homeless unemployed put up all over the country were called "Hoovervilles," in honor of his disastrous leadership.

Then along came Franklin D. Roosevelt, who was elected next. He pumped money into the economy. Created big government programs that hired hundreds of thousands if not millions of unemployed. Bought materials and other goods from businesses large and small. Kept lots of money in circulation for lending and spending.

Roosevelt was aided by the beginning of World War II at the end of the decade-beginning of the 40's. Wartime industries needed labor and materials in huge quantities. Again, spending stimulated the economy further.

After the war the economy remained very strong for decades, up until the mid 1970's.

Some people screamed that Roosevelt was a socialist (as they scream now) but the fact remains that he was so popular he became the first and only president to be elected for three terms in office. He is remembered as the man who brought America out of the Great Depression.

"Those who do not remember history are doomed to repeat it."



[edit on 17-8-2009 by Sestias]

Originally posted by princeofpeace
Short run based on the stimulus? What? Hardly any of the stimulus has been spent. They are saying that any good we are seeing in the economy right now woud have happened regardless and has nothing to do with the stimulus. Most of that money hasnt even been put to use.

Originally posted by brill
The events we are seeing now as just as the previous and more knowledgeable poster indicated...a short run based on the infusion of stimulus. Its smoke and mirrors essentially.

The article was specific to Japan and from what I've read Japan was dumped lots of stimulus in a pathetic attempt to move forward. As others have pointed out though you cannot possibly spend that much (from a US perspective) and make it all rosebuds and cartwheels, not gonna happen. Time will tell here but Dent has clearly indicated, by using data and trends, that a forthcoming depression is inevitable. Last time I checked unemployment is still inching its way up instead of down.

brill

[edit on 17-8-2009 by brill]

Lost And Found

I consider the following article, though it was written in March 2008 and thus before the more dramatic aspects of the meltdown came last fall, to be very helpful in outlining the nature of the Lost Decade and comparing it to the latest U.S. financial crisis:

AEI: Japan's Lost Decade

If I were to summarize what I think is the best approach to dealing with financial crises, it would be to avoid doctrinaire adherence to any single ideology, whether "left" or "right", and focus instead on pragmatic, rational measures tailored to addressing specific, systemic problems with the economy.

As with the military syndrome of "fighting the last war", business leaders and policymakers would be wise to avoid attempting to solve the last economic crisis, resist the temptation for philosophical experimentation and concentrate instead on what gets the job done.

Whatever that might be.

reply to post by Majic


I agree with you, but trying the same thing that Japan did, propping up banks and mortgage brokers didn't work. So we know that didn't work, what else is there to try?

It also just happens to be Japan and America have the highest business tax rates in the world. I say we cut back corporate tax, cut government spending to sustainable levels, and reduce the red tape and allow smaller businesses to be able to compete.

Now the problem that we run into is that, the debt deflation that the world is experiencing isn't going to go away until the debt is either paid, or defaulted. You keep hearing talk about how they want to stabilize home prices, that is because if they don't lots of banks are going to go bankrupt.

What has been done is that we have papered over all the periods of when the market wanted to correct it self, the answer has always been, spend money. So it is on good authority that spending money is not the answer and is documented fact. So we need to try a different approach and that approach leads to making it a more small business friendly environment.

Originally posted by Majic
Lost And Found

If I were to summarize what I think is the best approach to dealing with financial crises, it would be to avoid doctrinaire adherence to any single ideology, whether "left" or "right", and focus instead on pragmatic, rational measures tailored to addressing specific, systemic problems with the economy.

What do you do when cyclical events occur? Sometimes you cannot change what needs to happen and I firmly believe this to be the case here. Past depressions were a means to correct and reconstruct economic improbabilities. Does anyone here really believe for a minute that housing costs for example would continue to run at their inflated levels. It would be idiotic to think that our children would be paying that much more for homes based on the current or projected overvaluing of the housing market. With the impending crash of commercial real estate underway all that's lets are commodities, then its downhill from there. Hello breadlines and soup kitchens.

brill

reply to post by HunkaHunka


Just as an economic downturn needs to be confirmed with multiple quarters in a row, same goes for a recovery.

Given that part of the GDP equation is govt spending, when there is massive stimulus (govt spending) the first few quarters are viewed with a grain of salt. The issue in those numbers is that the GDP number is artificial given the govt spending and artificial demand caused by stimulus money that has to be spent if it is given. Hence why at the end of you article it mentions it 'petering out'.

As a related side note, that GDP number was drastically below analysts estimates causing a sell off in the Asian markets. In other words, analysts and govt officials in Japan thought the stimulus there and here would have a much larger impact on their economy. And given that it was much smaller than forecasts, it actually threw recovery in doubt. So without realizing it, you actually have provided statistics that support lack luster recovery if one at all.


[edit on 17-8-2009 by johnny2127]

Cyclic Resonance

reply to post by brill

Ideally, cyclic events will be handled in ways that don't make things worse, which usually means not overreacting to them. However, the lesson of the Great Depression is that sometimes things don't always work out on their own, and regardless of one's theoretical inclinations, people need to put food on the table or there will be trouble.

Love it or hate it, all economies are managed to some extent, and truly "free" free markets are an unattainable ideal wherever laws, taxes and crime exist. Even in "lawless" areas, there are laws, they just tend to be more ad hoc and adjudicated by brute force.

Granted, the historical track record for managed economies is rather dismal overall, but without the option to rewrite history and magically change our circumstances, it's what we've got.

The people managing our economy are expected to be good stewards, but their power is not absolute.

Hopefully their best will be good enough.

Originally posted by Majic
Cyclic Resonance

reply to post by brill

 

Ideally, cyclic events will be handled in ways that don't make things worse, which usually means not overreacting to them. However, the lesson of the Great Depression is that sometimes things don't always work out on their own, and regardless of one's theoretical inclinations, people need to put food on the table or there will be trouble.

Love it or hate it, all economies are managed to some extent, and truly "free" free markets are an unattainable ideal wherever laws, taxes and crime exist. Even in "lawless" areas, there are laws, they just tend to be more ad hoc and adjudicated by brute force.

Granted, the historical track record for managed economies is rather dismal overall, but without the option to rewrite history and magically change our circumstances, it's what we've got.

The people managing our economy are expected to be good stewards, but their power is not absolute.

Hopefully their best will be good enough.

I guess that's my point. We can't and have not learned from cyclical events as is is the case here. All the best intentions in the world can be laid out but our banking system, economic structure and plain greed ensure our ultimate periodic demise. I think its important as well to consider that my reference is not just to the Depression of the 30's but of previous depressions (1873). Obviously the Great Depression is at the forefront given several factors and coverage.

I would disagree with the notion that our economy is managed by good stewards. Let's be honest here. If the opportunity exists for people in a position of power they will abuse it, generally speaking, to better themselves. This is just human nature. No not everyone is out to screw the little guy but history has clearly shown us that greed runs rampant.

brill

A lot of Japan's recent profitiablity and growth has been due to sales to China, India, and elsewhere in Asia.

I wouldn't go so far as to say Japan is "decoupling" completely from its relationship with the USA. They still need to be under the US military umbrella, and they have massive US bond holdings, investments, and sales in the US. But they are becoming less a "colony" of the US and diversifying more. We can predict a more multilaterally-oriented Japan in the years ahead.

The US still has a lot of problems to sort out. Its at times like this that being the biggest creditor nation on earth (Japan) versus being the biggest debtor (USA) can make a big difference...the Japanese saved their pennies for a rainy day and bought an umbrella, it seems.