Japan's in Sheep Dip

cowmadagan · (#1 (**permalink**))

I've heard a whole whack of times that Japan's in trouble, but I always thought it was because the cost of living is too high, birth rates are dropping, and they just can't get much growth year after year.

If you're like me and haven't seen the actual figures, here you go.

Kan Urges Bank of Japan to help overcome deflation

It confused the hell out of me originally because they've been complaining about the JPY being too strong. It makes sense to me to just intervene and collect all this free money and keep it as reserves, and then use the reserves against the debt.

Well, that ain't gonna work. We're talking about a national debt of $10 trillion USD compared to their reserves of $1 trillion USD. Also, I've seen that about $½billion dollars tends to change a major currency pair by about 0.4 to 0.5 cents at the absolute most. So an intervention from 89 to the target of 95 would yield a meager $10-12 billion USD. Baby steps would also need to be taken to make sure the market didn't decide to amplify the decline and eat away at the reserves in a strengthening countermeasure.
blah blah blah

Pharaoh · (#2 (**permalink**))

Rumor has it that the lack of news on the fixes to some of their prior economic woes wasn't that reporters got bored, but that their government and banks managed to use creating accounting practices to make the problems appear to go away - for awhile. Just another one of those things to worry about when contemplating a world economic collapse.

cowmadagan · (#3 (**permalink**))

A gag order? In Asia?

ok...it's not like a tiger in Africa...(not including the zoo...)

Pharaoh · (#4 (**permalink**))

Probably less of a gag order and more of a deal between their central bank and all the other banks to make it look like everything is solved while really just clamping down the lid on the pressure cooker a little tighter. Combine that with a well timed scandal or two to keep the reporters busy somewhere else and the crisis can be delayed until someone else is found to take the blame.

"These aren't the droids you're looking for."
"These aren't the droids we're looking for."

Ricex · (#5 (**permalink**))

lol
"I find your lack of faith disturbing"

Eric Alyea · (#6 (**permalink**))

This is an email I got back from a man I am reviewing in the commerce zone Duellatorus review by Eric Alyea but thought it went well here.

Re: Fw: Forex Signal (Fri, Feb 05, 8:30 am EST) US NonFarm Employment
Thursday, February 4, 2010 1:16 PM

Eric
I spent an entire year watching and reading the news and economic reports everyday while trading the forex. What I realized is that "big stories" is the only thing that drives the news, this may be obvious to most, but most of the time these stories do not include all of or even most of the facts. Big corporations and the government are driven solely by greed and they do anything they can to make things appear better than they are in order to appease shareholders and voters. We never get the truth until way after the fact, even on the economic reports issued by the governments, the numbers are skewed and interpreted in favor of whatever their current agenda is. When you dig deeper into the numbers you see that many of the reports are not even close to what people think.
I have seen time and time again the markets react to these news releases and sometimes they do what they are "supposed" to do and other times they do the exact opposite. I watched the analysts over and over predict what would happen and then rationalize after the fact why it didn't happen the way they said, but as if that was what they expected anyway. What I realized is that if these so called brilliant economic analysts cannot figure it out and that is their job, how in the world can we expect ourselves to figure it out? Answer: We can't, no one can. This is the main reason why I include Zen trading in my program, because it helps traders realize that we have no clue as to what the market will do next, but we can accept and embrace that and still trade successfully without trying to figure it out.
That said, I do keep up on the news, but I never make trades based on it and I take everything I read with a grain of salt.

Eric Alyea · (#7 (**permalink**))

Pharaoh knows how to appreciate suicide sheep.

JPY rattle them dags.

Ricex · (#8 (**permalink**))

I don't know what his Zen trading is all about Eric but I pretty much agree with your man concerning news and pundit pontifications. Fundamentals are obviously important to the market but trying to figure out what all those, sometimes conflicting, facts and figures mean is a whole different ball game.

Apart from the really big market movers such as interest rate changes and commodity prices if they are correlated, I gave up trying to work out all that s**t a long time ago.

cowmadagan · (#9 (**permalink**))

Talk is cheap, but the perturbed body language of a smoking baby is irrefutable proof.