Wow! Japan saw its industrial output plunge by 9.6% month to month in December. This is coming from the world's second largest economy. The Bank of Japan warned of an unimaginable contraction in the Japanese economy.
While the December drop was most severe, Kazuo.Momma, researcher for the central bank, said that there could be an even greater decline between January and March. He said it would be quite a while before inventories are fully adjusted and output recovers.
In other news, a private research group reported a 16% year on year rise in bankruptcies, the largest in six years. Machine orders a bellwether indicator, plunged 17% on a quarter to quarter basis in three months to December. This is the fastest drop on record.
In nearby Taiwan, the news was also bleak. Taiwan, Asia's sixth largest economy, saw exports fall by a whopping 44.1% from a year ago.
So overall, the news from Asia is quite gloomy.
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Reader Comments (Page 1 of 1)
2-10-2009 @ 5:12PM
BHarrison said...
How is it that the government is injecting $350 to $750B in the FIs and the corporations (and Obama is looking at injecting another $850B), and yet we STILL have "DEFLATION", no RoI on the vast bulk of new investments, "virtually ZERO INTERESTS RATES" on cash investments (T-Bills, CDs, etc.)?
How can so much "money" be injected in the economy with so little results . . . shouldn't prices be going up? Shouldn't there be a "reasonable interest rates" for cash investments. Why are people (and even other countries) investing in U.S. government Treasury Notes without getting any interests. None of tis appears to make sense.
I'm sure that the guys who developed the "derivatives" concepts will have some type of answer to these questions . . .
2-10-2009 @ 9:39PM
paul s said...
The banks used the first 350 bill to pay off their preferred stock holders and are hoarding whats left until they get the rest that they were promised by Paulson and Bush. They are playing hardball with Obama. They don't want to loan money at 5% or less, unless it is short term: 5 years or under. They want to loan at 6.5% or better. At 15% they can cover their own toxic waste. Shame, Guilt, Integrity has no meaning on Wall St. It never has, and it never will.
2-10-2009 @ 10:20PM
Iridium said...
The high value of the Yen is killing Japan. To be able to sell exported products at prices people can afford in other countries they must take a loss.
You can't take a loss and stay in business. I work for an American branch of a Japanese company. We've lost 20% in profit due to the collapse of th edollar vs the Yen. Because of big box business in America we are down to 8% profit on anything sold. We can't stay in business on 8%.
Either the big accounts need to give up thier insane margins or we need a better price from Japan. I'd rather see the big retialers give up 10% since they make 60% by selling our product.