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24 January 2009

Oh to live in Japan......



From The Times
January 24, 2009

Taro Aso gives Japanese £100 each to spend way out of recession ................
For £200, a couple could have a sparkling day at the Yunessan spa

Leo Lewis, Asia Business Correspondent


With Japanese exports plunging and companies retrenching, the fate of the world’s second-biggest economy may now lie in an electronic cigarette, a ripe musk melon or a bag of dumplings shaped like the Prime Minister’s face.

Government efforts to stimulate the economy and insulate it from the ravages of recession have failed. The pace and scale of decline, say economists, has proved too big for the country’s creaking, deadlocked political system to cope with and deep recession is now a certainty.

But Taro Aso, the increasingly reviled Prime Minister, believes that he has hit upon a scheme that will solve the crisis in an orgy of consumer spending.

The move, which he has described as “the best economic measure of all”, involves a handout of at least 12,000 yen (£100) to every citizen over the age of 18. The prospect of the windfall has unleashed a national wave of speculation about how the money might best be spent, and the eccentric world of Japanese retail is pushing hard to attract the cash.

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Among the more extreme recommendations on how to spend the money is to applaud Mr Aso’s plan by buying a gift box of Aso-themed goods: Y12,000 would buy a magnificent spread including a coffee mug, dumplings, shopping bag, tummy-warmer and dog-sized T-shirt bearing his image.

The notoriously pricey Japanese fruit industry is also vying to be among the winners of an overnight sense of opulence. The price of a much prized Shi-zuoka Crown – the self-declared king of musk melons – has suddenly been brought down from Y30,000 to a convenient Y12,000.

The service sector, too, has a number of seasonal opportunities: taking advantage of a discount travel coupon, a couple could enjoy the romantic and antiageing effects of a day at the chocolate and wine baths of Yunessan, buy a souvenir and expect little change from Y24,000.

The same sum would also pay for a family to spend the night in sleeping bags on the floor of the Enoshima Aquarium on the outskirts of Tokyo. The presence of hundreds of rippling squid in their tanks offers purportedly healing effects – a Y24,000 necessity.

Meanwhile, offerings from the often imaginative world of Japanese electronics that fit the bill include a cigarette which glows and emits grapefruit steam into the user’s mouth.
The scheme, however, has plenty of doubters. Richard Jerram, the chief Japan economist at Macquarie Securities, believes that it is doomed to failure and is a sure sign that the Japanese Government “just does not understand how staggeringly the world has changed”.
The problem, says Naomi Fink, a strategist at Tokyo Mitsubishi, is not that the Japanese do not have cash, but that they are too scared to spend it. Japanese households are already sitting on cash savings estimated at Y778 trillion (£6.5 trillion).

Have your say
The truth is that, as a nation, Japanese people are undoubtedly some of the most frugal in the entire world. + They set a great example to the rest of the world in terms of their industrious nature and sense of patriotism. Mr. Aso will be perceived as being a kind man - who would argue that point?
NDG, Tokyo, Japan

Have your say

There's no new motor to drive the economy | Matthew Parris - Times Online

There's no new motor to drive the economy Matthew Parris - Times Online

19 January 2009

TheSpec.com - Business - House prices, sales plunge across Canada

TheSpec.com - Business - House prices, sales plunge across Canada

Should Banks be lending at all????????

Should banks be lending to house buyers?January 19th, 2009 by Peter King
Should the UK government really be encouraging households to borrow money to buy houses in the current climate? And should it be encouraging banks to lend to them as part of the latest bailout package?

Clearly there is considerable pent up demand for housing and this will grow over time. But a responsible government would surely be telling first-time buyers and others to put off their purchases. What is the sense in taking out a mortgage to pay for an asset that is declining in value by 15% a year?

And instead of exhorting the banks to offer cheap finance so households can saddle themselves with negative equity, the government should be congratulating them for their entirely rational behaviour of limiting their exposure to the housing market.
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Gordon Porridge........

January 19, 2009
What Gordon Brown and Richard Nixon have in common
Just after the Premiere of Frost/Nixon I reflected on the similarity between Tony Blair and David Frost that must have made it easier for Michael Sheen to play both characters.
Now the author of the play, Peter Morgan (who also wrote The Deal about the so-called Granita Pact), has noted the shared easy charm of these two characters.
Fascinatingly he made this comparison as part of a discussion of the shared characteristics of Richard Nixon and Gordon Brown (another likeness I have remarked upon):
They are people who are hard to like, people who have complicated emotional inner landscapes, and somehow have had trouble accessing them.
"People will hate me for saying this, but there are emotional similarities between Gordon Brown and Richard Nixon. Gordon Brown finds it hard to be liked and yet he's a brilliant man. But people don't warm to him, they don't like him.
Posted by Daniel Finkelstein on January 19, 2009 at 01:40 PM in Gordon Brown

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Its funny but I was beginning to think there is a physical resemblance now too. Brown's jowls and that fake smile are increasingly Nixonesque.
Posted by: Simon 19 Jan 2009 13:55:30
The similarity, for me, is that Dr James Gordon Brown, like the late Richard M. Nixon, is a bare-faced liar.
Posted by: Keith Darby 19 Jan 2009 14:06:56

Documentary # 3 - Casino Capitalism

Worth spending time on this view.......

Market Skeptics: *****Hyperinflation will begin in China and it will destroy the dollar*****

Market Skeptics: *****Hyperinflation will begin in China and it will destroy the dollar*****

RBS suffers biggest loss in UK history - Telegraph

RBS suffers biggest loss in UK history - Telegraph

Warning that house prices may fall by 80% - The Irish Times - Tue, Jan 13, 2009

Warning that house prices may fall by 80% - The Irish Times - Tue, Jan 13, 2009

06 January 2009

House prices 2009 ~ 2012

UK House Price Crash and Depression Forecast 2007 to 2012

In conclusion, the sum of the above analysis suggests that house prices having fallen by 19% are about half way to the lows, and therefore suggest that house prices will decline by 38% from the August 2007 peak. The housing market trend is clearly currently in the panic stage as we are witnessing near unprecedented house price falls at the rate of more than 16% per annum, far beyond that of the 1990's bear market. This rate of decline is not sustainable, and I am expecting this phase of the housing bear market to come to an end during the second half of 2009. However my expectation is that following the crash the market will enter a period of depression spanning several years after the market puts in a nominal price low and then embarks upon a weak up trend as the below graph illustrates.

Risks to the Forecast

The prime risk to the nominal house price forecast is the currency crash induced inflation, as earlier analysis suggested that house price falls can be brought to a halt by a significant currency devaluation, which has already taken place to the tune of 30%. This will mask the real terms house price falls that will make itself evident in the protracted housing market depression where house prices are not able to keep pace with inflation and therefore continue to erode in real-terms.
My next newsletter will aim to forecast the major trends for financial markets during 2009. To receive this on the date of publication subscribe to my always free newsletter.


By Nadeem Walayathttp://www.marketoracle.co.uk

02 January 2009

UK Biggest hose price drop in History....

Biggest house price drop on record

House prices plunged by 16.2% during 2008 in the biggest drop for a calendar year on record, Halifax said.
Last year's price plummet, which came after the average value of a property in the UK fell 2.2% in December, was the biggest year-on-year fall since the Halifax began recording data in 1983.
Britain's biggest mortgage lender said the typical price of a property now stands at £159,896 - back to August 2004 levels.
The drop in annual house price inflation measures prices in the previous three months compared with the same period a year ago. But if house prices in December are compared with prices in December 2007, the fall is even more dramatic at 18.9%.
And Halifax warned that the property market will come under further pressure in 2009 as the financial crisis continues to restrict lending in the UK.
Bank of England figures on Friday revealed that just 27,000 mortgages were approved for new house purchases during November, which was a new record low.The Bank also said in its credit report that banks and building societies plan to cut back further on lending as the economic outlook worsens.
However, the Halifax offered hope that the downturn in the property market could be limited as housing affordability improves. The lender said the house price to earnings ratio - a key affordability measure - had declined to its lowest level for more than five-and-a-half years.
First-time buyers (FTBs) may also be in line for some relief, with the proportion of local authorities where housing is affordable for FTBs more than trebling in 2008, according to the Halifax.
Economist Howard Archer of IHS Global Insight cautioned that, despite the interest rate falls and property price reduction, the outlook for the housing market remained "bleak". He predicted house prices to fall by a further 15% on the Halifax measure in 2009.
This would see property prices plummet by 32% in nominal terms from their August 2007 peak of £199,612 to stand at £135,912 at the end of this year, he said. House price falls would then ease at the start of 2010 and flatten out in the latter months of the year, added Mr Archer.
Copyright (c) Press Association Ltd. 2009, All Rights Reserved.

01 January 2009

Good Bye to 2008......

2008: An Extraordinarily Long Year

2008 is rapidly winding down. If it seems like it's been a long year, it's because it has been.Tick tock ... tick: Extra second added to 2008

Those eager to put 2008 behind them will have to hold their good-byes for just a moment this New Year's Eve.The world's official timekeepers have added a "leap second" to the last day of the year on Wednesday, to help match clocks to the Earth's slowing spin on its axis, which takes place at ever-changing rates affected by tides and other factors.The U.S. Naval Observatory, keeper of the Pentagon's master clock, said it would add the extra second on Wednesday in coordination with the world's atomic clocks at 23 hours, 59 minutes and 59 seconds Coordinated Universal Time, or UTC.That corresponds to 6:59:59 p.m. EST (23:59:59 GMT), when an extra second will tick by -- the 24th to be added to UTC since 1972, when the practice began.The first leap second was introduced into UTC on June 30, 1972. The last was added on December 31, 2005.Five Themes For 2009Please take more than an extra second to ponder

Five Themes You Need to Know for 2009.
Before we get to 2009, first, think back to a year ago. Deflation was barely on the radar of mainstream economists and financial media. Most viewed it as an impossibility, focusing instead on what was supposed to be the resurrection of the commodities bull market.Even today, while paying deflation minor lip service here and there, the vast majority of economists and financial media are ill-prepared for just how severe this ongoing deflationary credit contraction and debt unwind is going to be.Consequently, if there is one theme that stands above all else in 2009, it will be this: The despair that unfolds as the point of recognition emphasizes the "de-" in deflation. The fat is in the fire.....2. Putting the "De-" In DeflationAs declining risk appetites manifest in nearly everything in 2009, from our collective views on financial risk to our tastes in culture, music, film and fashion, we will see a focus on declines, destruction and devaluation. Perhaps nowhere will this be more obvious than in the disintegration of large-scale social networks into smaller, more focused and intimate groups.While peak social mood helped propel the movement toward increasingly open social networking platforms and large scale interactions, the rush to disassociate from the crowd will inevitably manifest as a reduction in broad network exposure and a preference for close-knit, tighter communities. Beneficiaries of this movement will be families, small groups and, to an extent, neighborhoods....5. Markets: Gold Declines, Dollar Rises, Interest Rates Hover at Unimaginable LowsI recently covered in the article, "Bear Markets Ain't Over 'Til They're Over," the reasons why I believe probabilities favor dramatic new stock market lows in 2009, but what about the other asset classes, gold, currencies and bonds?It is no secret that in a deflationary debt unwind all asset classes suffer absolute declines. In a relative sense some asset classes may fare better than others, but the problem remains that you can't spend negative relative outperformance.As for commodities and precious metals, look for 2009 to begin optimistically with commodities retracing some of their disastrous declines this year. Gold is also in the late stages of another attempt at cracking the $1,000 level. Unfortunately, the purpose of deflationary debt unwinds is to crush the spirits (and speculative juices) of all who attempt to participate in financial markets. The point of recognition for this deflationary debt unwind will culminate in another wave of intense selling pressure as the last speculators standing give up.There has been no shortage of top callers in the bond market of late. From a technical standpoint bonds certainly begin the year with the rubber band stretched painfully to the upside. But do not underestimate the power of deflationary forces to keep a floor under bond prices as interest rates hover at lows that, as recently as a year ago, seemed unimaginable.So there you have it. Only 366 days until 2010. That's the good news. When all is said and done, perhaps the best thing that will be said of 2009 is that it only lasted a year. Kevin Depew is always a great read. I encourage you to read the above article in entirety. There's three more points well worth reading. You may even wish to consider bookmarking him. I have.However, I would be remiss if I did not point out the following: 2009 will be one day and an additional second shorter than 2008. We can all be thankful for that.

Mike "Mish" Shedlockhttp://globaleconomicanalysis.blogspot.com

Bad in Wales

Slump is worst since 1930s - veteran estate agent

Jan 1 2009

by Nick Machin, South Wales Echo

THE current economic slump will be worse than the Great Depression of the 1930s, a South Wales estate agent has warned.
And Saul Magrill should know – because he was there.
Mr Magrill, 94, thought to be Britain’s oldest working estate agent, is shocked at the downturn in the housing market.
He blamed the banks for being “greedy” and spenders for lacking self-discipline.
Mr Magrill started work as a property consultant when he was just 17 in 1931, at the height of the pre-war economic downturn.
But Mr Magrill, who works one day a week for the Chris John Estate Agents in Pontcanna, Cardiff, as a consultant, says that was nothing compared to what Britain is going through now.
He said: “It’s much, much worse now than it was in the 1920s or 1930s.
“I started work when I was 17 in 1931 during the height of the Depression.
“But I have to say that I think 2009 will be much worse than 1931 because people don’t know the old-fashioned rules of budgeting.”
Mr Magrill said property prices had been too high for years and a slump was only a matter of time.
“I’ve been saying for a long time that the bubble had to burst. People were taking out mortgages more than 10 times their annual salary – which they just couldn’t afford.
“In the 1930s people mainly rented property anyway, which was more affordable than it is today, so there wasn’t this risk of lots of people losing their homes and having negative equity. The banks have been deviant. They have been very greedy.”
Mr Magrill added that people today would find it harder to adjust to budgeting.
“In the 1930s it was always hard and everyone struggled so you would stick together,” he said.
“But now people are buying things on credit they can’t afford and are being encouraged to by retailers.
“There was never that option or temptation in the 1930s – you had to make do with what you had.”

Gordo gets this one right!!!!

Brown warns 2009 'won't be easy' ~ True Gordo and you're to BLAME!!

pa.press.net

Gordon Brown has warned the country that 2009 "won't be easy" as it faces up to the economic crisis.

In the Prime Minister's traditional New Year message, he insisted that Britain would pull through - but admitted the challenge was "enormous". He wrote: "This coming year won't be easy, but I am determined that this government will be the rock of stability and fairness on which the British people can depend."

"The scale of the challenges we face is matched by the strength of my optimism that the British people can and will rise to meet them. Because we're not a do nothing people and we've always risen to every challenge. We can meet the security challenge, the environmental challenge and the enormous economic challenge."

Amid widespread pessimism about 2009, the premier sought to strike an optimistic note at the start of what will be a make-or-break year for the Labour government. The prospects for a fourth consecutive term in office are likely to turn on the eventual length and extent of Britain's first recession since the early 1990s.

But Mr Brown insisted the British people, and the Government, had demonstrated their ability to get through similar challenges in the past. He said the task for 2009 was to "build tomorrow", with jobs for the digital age and the green agenda, new transport and communications infrastructure and enhanced skills.

Working together with Britain's world partners, he said, such actions would ensure the UK would "hit the ground running" after the downturn. He wrote: "Today the issues may be difference, more complex, more global. And yet the qualities that are needed to meet them have been demonstrated in abundance by the British people before."

The Prime Minister also set out his ambition to see a new economic philosophy replace the "unbridled free market dogma" which has been discredited by the financial crisis, "I want 2009 to be the year when the dawn of a new progressive era breaks across the world," he said.
That would mean governments investing through economic lows and offering "real help" to families and businesses when they were most in need. In a swipe at the Tories, the Prime Minister insisted failure to act would lead to a worse downturn and a weaker economy in the future.

He portrayed the Government's response to the autumn banking crisis - such as the recapitalisation of high street banks - as a "decisive" strategy to quell people's fears. He said: "The scale and speed of the global financial crisis was, at times, almost overwhelming. I know that people felt bewildered, confused and sometimes frightened. That is why the response had to be swift and decisive."
Insisting that his "guiding principle" was the wellbeing of British families and businesses, he added: "What keeps me up at night, and gets me up in the morning, are the hopes and aspirations of the British people."

And the Good news for Drinkers

Pub chain slashes beer prices...........What????? Tell me that again!!!!!!!!!!

Pub chain slashes beer prices.....Yes.....it's true!!!!!!!!!
pa.press.net

Leading pub chain JD Wetherspoon is to slash prices on some drinks and food, offering a pint of beer for less than £1, down to 1989 prices, the company revealed.

The company, which operates 713 pubs across the UK, said the price reductions on some beer, bottled lager, wine and spirits will run "indefinitely".

A number of meals will also be offered at £2.99, said the firm, which opened 20 new pubs in the last few months of 2008, creating hundreds of new jobs, despite the economic downturn.

Wetherspoon's chief executive John Hutson said: "People enjoy going to the pub. However, we appreciate that the economic downturn means that they now have to be more careful with their money.

"We believe that our new food and drink prices will allow people to enjoy a visit to a Wetherspoon pub without it costing them too much.

"Unlike most sales that start in January, our offers will not be ending within days, but will run indefinitely."

Greene King IPA will be cut to 99p a pint, as will a bottle of San Miguel, the company announced.

New Year Newish Problems.....Welcome to 2oo9

1,600+ retailers expected to go bust in 2009

REUTERS

January 01 2009

LONDON (Reuters) - The downturn in consumer spending will drive over 1,600 retailers out of business in 2009, triggering thousands of job losses and leaving more than one in ten shops empty, a report said Thursday.
Market researchers Experian said trading conditions for survivors would be the worst for at least 30 years and there would be knock-on effects at suppliers, manufacturers and service providers.
"There is no doubt that the impact on retail will resonate through the entire economy," said Jonathan de Mello, Director of Retail Consultancy at Experian.
Retailers are slashing prices as indebted shoppers curb spending amid rising unemployment, sliding house prices and fears of a deep recession.
Experian said big discounts had lured some consumers back into stores, with shopper numbers leaping 12.8 percent in the last week of December. But that was not enough to prevent a 3.1 percent drop in footfall for the month as a whole.
"The last minute surge in shoppers came as a relief to retailers but for most it was not nearly enough," de Mello said.
"The boost in numbers was driven by massive unprecedented discounting all at the expense of retailer margins."
Some retailers have not survived, with sweets-to-DVDs chain Woolworths and furniture group MFI falling into administration, a form of creditor protection, in the run-up to Christmas and several smaller companies following suit in recent days.
Experian said 1,137 non-food retailers went out of business in the year ended December, up 21.2 percent on the year, and forecast 440 more would become insolvent over the next four months and the total for 2009 as a whole would be about 1,400.
Some 194 food retailers failed in 2008, up 10.9 percent, and Experian predicted that number would rise to about 230 in 2009.
"The collapses we've seen so far are just the tip of the iceberg," de Mello said.
"At the moment there is too much space in the market and not enough demand. Many retailers are either making no margin or losing money. We anticipate that January will be the toughest for 30 years."
Experian said the vacancy level on shopping streets was around 7 percent, but with a flurry of businesses recently going into administration that would rise to about 10 percent -- "a figure which is likely to increase as more retailers go into administration in January."
"This large scale retail business failure is expected to have a significant impact on high street returns, affecting everything from investors' yields on rents to revenues to local authorities," it said.
"This is not to forget the devastating impact on people's jobs and livelihoods," de Mello. "Britain is still a nation of shop keepers and the retail sector is one of the UK's largest employers."
(Reporting by Mark Potter; Editing by Mike Nesbit)