Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Japan’

Avoiding the Japanification of Europe

Posted by hkarner - 7. August 2020

Date: 06‑08‑2020

Source: Project Syndicate by Lucrezia Reichlin

Lucrezia Reichlin, a former director of research at the European Central Bank, is Professor of Economics at the London Business School.

The COVID‑19 crisis has upended many existing European Union rules and institutional guidelines. If EU leaders take this as an opportunity to pursue radical, forward‑looking change, the COVID‑19 upheaval could move the bloc to a better place.

BOLOGNA – As monetary and fiscal authorities have acted aggressively to blunt the COVID‑19 pandemic’s economic impact, public debt and central‑bank balance sheets have swelled rapidly. In the European Union, this trend is compounded by a new €750 billion ($886 billion) COVID‑19 recovery fund, which includes the issuance of so‑called “recovery bonds” guaranteed by the EU’s multiyear budget and, possibly, by Europe‑wide taxation.

This is a whole new world for all advanced countries except one: Japan. It is not the “nice” world of the 1990s, characterized by stable inflation, steady output, fiscal prudence, and a narrow central‑bank focus on manipulating short‑term interest rates to meet inflation targets. But nor does our turbulent world resemble that of the 1970s, marked by high inflation, volatile output, fiscal profligacy, and excessively accommodative monetary policy. Den Rest des Beitrags lesen »

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Japan probes the limits of economic policy

Posted by hkarner - 6. Juni 2020

Date: 04‑06‑2020

Source: The Economist Free exchange

Including loan guarantees, fiscal support this year will amount to 40% of GDP

In the 1990s Japan seemed to offer a cautionary tale, an example of how feckless macroeconomic management could lead to troubles that other governments had long ago learnt to avoid. By the 2000s many economists came to see it as a harbinger. The path its leaders took in their efforts to lift weak growth, chronically low inflation and near‑zero interest rates has been followed, repeatedly, by others in the rich world. Japan’s trailblazing has helped reveal that the limits to extreme policy are much farther away than economists had thought at first. This path‑finding may well continue. At the end of May the government announced spending plans that will take total fiscal support for the economy this year to 40% of gdp. (Because the measures include loan guarantees, the budget deficit will probably amount to less than half of that.) The colossal figure might bolster queasy politicians elsewhere. But even as it does so, Japan’s fiscal radicalism exposes the limits to what government borrowing can achieve. Den Rest des Beitrags lesen »

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Japanified World Ahead

Posted by hkarner - 15. April 2019

By John Mauldin

April 12, 2019

Losing Decades
Too Much, Too Fast
A $10 Trillion Federal Reserve Balance Sheet
Mastering Private Markets

Regular readers may have noticed me slowly losing confidence in the economy. Your impression is correct and there’s a good reason for it, as I will explain today. The facts have changed so my conclusions are changing, too.

I still think the economy is okay for now. I still see recession odds rising considerably in 2020. Maybe it will get pushed back another year or two, but at some point this growth phase will end, either in recession or an extended flat period (even flatter than the last decade, which says a lot). And I still think we are headed toward a global credit crisis I’ve dubbed The Great Reset.

What’s evolved is my judgment on the coming slowdown’s severity and duration. I think the rest of the world will enter a period something like Japan endured following 1990, and is still grappling with today. It won’t be the end of the world; Japan is still there, but the little growth it’s had was due mainly to exports. That won’t work when every major economy is in the same position.

Describing this decline as “Japanification” may be unfair to Japan but it’s the best paradigm we have. The good news is it will spread slowly. The bad news is it will end slowly, too. Den Rest des Beitrags lesen »

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How Western Economies Can Avoid the Japan Trap

Posted by hkarner - 9. April 2019

Mohamed A. El-Erian, Chief Economic Adviser at Allianz, the corporate parent of PIMCO where he served as CEO and co-Chief Investment Officer, was Chairman of US President Barack Obama’s Global Development Council. He previously served as CEO of the Harvard Management Company and Deputy Director at the International Monetary Fund. He was named one of Foreign Policy’s Top 100 Global Thinkers in 2009, 2010, 2011, and 2012. He is the author, most recently, of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.

With the return of Europe’s economic doldrums and signs of a coming growth slowdown in the United States, advanced economies could be at risk of falling into the same kind of long-term rut that has captured Japan. To avoid that outcome, policymakers must recognize and address the deeper structural forces at work.

NEW YORK – Not too long ago, the conventional wisdom held that “Japanification” could never happen in Western economies. Leading US economists argued that if the combined threat of weak growth, disinflation, and perpetually low interest rates ever materialized, policymakers would have the tools to deal with it. They had no problem lecturing the Japanese about the need for bold measures to pull their country out of a decades-old rut. Japanification was regarded as the avoidable consequence of poor policymaking, not as an inevitability.

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The UK’s Suicidal Tendencies

Posted by hkarner - 7. Februar 2019

Ian Buruma is the author of numerous books, including Murder in Amsterdam: The Death of Theo Van Gogh and the Limits of ToleranceYear Zero: A History of 1945, and, most recently,  A Tokyo Romance.

Most politicians on the left and the right – including Prime Minister Theresa May, who before the Brexit referendum was in favor of Britain remaining in the EU – know that leaving the European Union without an exit agreement would be a national calamity. So why have almost all refused to do anything to halt the slide toward a catastrophic no-deal Brexit?

NEW YORK – Watching a sophisticated democratic society knowingly walk into a predictable and avoidable national disaster is a rare and alarming experience. Most British politicians are well aware that leaving the European Union with no agreement on the post-Brexit relationship will cause enormous damage to their country. They are not sleepwalking into the abyss; their eyes are wide open.

A minority of deluded ideologues doesn’t mind the prospect of Britain crashing out of the EU with no deal. A few chauvinist dreamers on the right, egged on by sections of the press, believe that the bulldog spirit of Dunkirk will overcome early setbacks and Great Britain will soon rule the waves again as a great quasi-imperial power, albeit without an empire. Neo-Trotskyists on the left, including Jeremy Corbyn, the leader of the main opposition Labour Party, seem to think that catastrophe will spur the British people to demand true socialism at last. Den Rest des Beitrags lesen »

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Japan shrinking as birthrate falls to lowest level in history

Posted by hkarner - 28. Dezember 2018

Date: 27-12-2018
Source: The Guardian

In 2018 there were 921,000 births and 1.37m deaths, with government efforts failing to encourage families to have more children

The birthrate in Japan fell to 1.43, well below the 2.08 required to keep the population stable.

Japan suffered its biggest population decline on record this year, according to new figures that underline the country’s losing battle to raise its birth rate.

The number of births fell to its lowest since records began more than a century ago, the health and welfare ministry said, soon after parliament approved an immigration bill that will pave the way for the arrival of hundreds of thousands of blue-collar workers to address the worst labour shortage in decades. Den Rest des Beitrags lesen »

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The Global Economy’s Three Games

Posted by hkarner - 29. Oktober 2018

, Project Syndicate

Jean Pisani-Ferry, a professor at the Hertie School of Governance (Berlin) and Sciences Po (Paris), holds the Tommaso Padoa-Schioppa chair at the European University Institute and is a senior fellow at Bruegel, a Brussels-based think tank.

Three major players – the United States, China, and a loose coalition formed by the other members of the G7 – are shaping the future of the international economic and geopolitical order. And they are all engaged in three contests simultaneously, without knowing which one is the most important.

PARIS – Chess masters are able to play simultaneously on several boards with several partners. And the more time passes, the more US President Donald Trump’s international economic strategy looks like such a match.

There are three major players: the United States, China, and a loose coalition formed by the other members of the G7. And there are three games, each of which involves all three players. Unlike chess, however, these games are interdependent. And no one – perhaps not even Trump – knows which game will take precedence. Den Rest des Beitrags lesen »

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Europe Is Left in the Dust as U.S. Stocks Roar

Posted by hkarner - 30. September 2018

Date: 30-09-2018
Source: The Wall Street Journal

While U.S. and Japanese shares raced ahead, Europe’s shares were left behind in third quarter

European stocks have been left behind by a rally that has taken the U.S. market to record highs in the third quarter.

Few analysts see the region catching up soon, unless there is clarity on the political and trade concerns that pushed investors to sell.

Investors have withdrawn money from European equity funds in 28 of the past 29 weeks, driving the share of Europe in global portfolios to its lowest since January 2015, when the European Central Bank announced its massive bond-purchase program, according to data from fund tracker EPFR and the Institute of International Finance.

That has largely reversed the tide of cash that poured into the region in early 2017, when an election in France elevated investors’ preferred candidate to power. In contrast, funds in the U.S., Japan and even some emerging-market equities have drawn inflows this year.

The Stoxx Europe 600 index rose less than 1% in the third quarter, compared with a 7.2% gain for the S&P 500 and 8.1% for Japan’s Nikkei Stock Average. The European index is now trading below where it was one year ago, compared with an 8.2% gain in a broad index of world stocks.

“U.S. client interest in Europe is very low right now—almost as low as it gets,” said Richard Turnill, BlackRock’s global chief investment strategist.

As the U.S. economy continues its robust run, the gap between 10-year German and U.S. government bond yields has reached its widest since the euro was launched in 1999, according to data from Tradeweb and Thomson Reuters.

The downbeat sentiment comes even as Europe’s earnings expectations for the year have remained stable, the euro and British pound have stopped climbing, and the region’s economy has shown signs of stabilizing after a tricky start.

Our view on Europe is predominantly politically driven,” said Candice Bangsund, portfolio manager at Fiera Capital, which currently holds a smaller-than-usual allocation to European stocks.

The future trading relationship between the U.K., one of the region’s largest economies, and the rest of the continent remains uncertain as Brexit negotiations drag on. Italy’s new government, meanwhile, has significantly widened its budget-deficit target, raising questions about the country’s debt sustainability and relationship with Brussels.

The U.K. and Italy’s benchmark stock indexes have both seen double-digit percentage falls in their price-to-earnings ratios this year amid the uncertainty.

European companies are also more exposed than those in the U.S. to emerging markets, and the developing world has been hit by a rising dollar, expensive oil and concerns about trade protectionism.

Roughly 19% of revenues from companies listed in the Stoxx Europe 600 come from emerging markets, according to FactSet. That compares with 14% for the S&P 500, an index of large-cap U.S. stocks.

Roland Kaloyan, head of European equity strategy at Société Générale, said the correlations between European stocks and emerging markets recently reached levels last seen in 2010.

But trade protectionism is by far the biggest risk to Europe’s outlook, analysts say.

Europe’s auto sector has been hit particularly hard by worries about tariffs, trading down about 23% from its peak in January.

“Europe is more exposed to protectionism because it has a more open economy and has closer ties to China,” said Silvia Dall’Angelo, senior economist at Hermes Investment Management.

Uncertainty about future trade relations has already hit eurozone exports. In manufacturing, export orders failed to grow for the first time in five years.

All this means there will be bargains in Europe, should more clarity come on the political front, some investors say.

European stocks now trade at 13.9 times future expected earnings, compared with 15 at the start of the year.

European companies are seeing revenue upgrades for the first time in a year, according to strategists at UBS . “A lot of investors are looking at valuations and looking for a reason to come back” to Europe, said Mr. Kaloyan.

If we got some sort of clarity on Italy or Brexit, we could see a rebound.”

Much will also depend on whether investors continue to favor so-called growth stocks such as technology companies, which make up a small portion of European indexes. Tech stocks in the S&P 500 are up roughly 19% this year and now make up 21% of that index. Tech makes up just 5% of the Stoxx Europe 600. Unless value stocks—those that are trading for the lowest prices relative to their earnings or underlying net worth—start to outperform, it will be difficult for Europe to pull ahead, fund managers say.

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Japan’s Successful Economic Model

Posted by hkarner - 21. September 2018

Adair Turner, a former chairman of the United Kingdom’s Financial Services Authority and former member of the UK’s Financial Policy Committee, is Chairman of the Institute for New Economic Thinking. His latest book is Between Debt and the Devil.

Japan’s GDP growth lags most other developed economies, and will likely continue to do so as the population slowly declines. But what matters for human welfare is GDP per capita, and on this front, the country excels.

TOKYO – Nearly everyone says that Japan’s economic model has imploded. Since 1991, growth has averaged just 0.9% versus 4.5% over the previous two decades. Slow growth, combined with large fiscal deficits and near zero inflation, has driven government debt from 50% of GDP to 236% of GDP.

Abenomics, the cluster of reforms initiated by Prime Minister Shinzo Abe when he came to power six years ago, promised to get inflation up to 2%. But five years of zero interest rates and massive quantitative easing have failed to achieve this. A fertility rate of 1.4 and near-zero immigration mean that Japan’s workforce could shrink by 28% over the next 50 years, making health care for the elderly unaffordable and dramatically increasing the fiscal deficit, which is already running at 4% of GDP. Den Rest des Beitrags lesen »

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Japan im Wandel: Ein Land geht in Rente

Posted by hkarner - 17. September 2018

Date: 16-09-2018

TV-Spots für Senioren-Windeln, Probeliegen im Sarg auf der Todesmesse: Japans Industrie stellt sich auf die vergreisende Bevölkerung ein. Für das Land ist der Wandel ein gigantisches Problem.

Seit 1995 berichtet Wieland Wagner, mit Unterbrechungen, für den SPIEGEL aus Tokio. Über Jahrzehnte hat er das Land bereist, Menschen getroffen, die Kultur durchdrungen. Das folgende Kapitel aus seinem neuen Buch „Japan. Abstieg in Würde“ widmet sich der Industrie rund ums Älterwerden.

Wieland Wagner:
Japan. Abstieg in Würde
Wie ein alterndes Land um seine Zukunft ringt

Die Japaner leben im Durchschnitt immer länger, und darauf waren sie lange durchaus stolz: Alljährlich, zum Tag der Ehrung der Alten, den die Nation am dritten Montag im September als amtlichen Feiertag begeht, bekamen die über Hundertjährigen im Namen des Premiers Silberbecher überreicht.

Inzwischen ist diese respektvolle Geste dem Staat zu teuer geworden. Im Jahr 2016 lebten bereits 65.692 über Hundertjährige in Japan, etwa so viele, wie eine mittlere deutsche Stadt Einwohner hat. Von den Hochbetagten waren 87,5 Prozent Frauen. Bei der ersten offiziellen Zählung 1963 hatte Japan dagegen erst 153 Hundertjährige. Dieser Tage, wo die Jubilare zahlreicher und zahlreicher werden, sind die Becher, die sie geschenkt bekommen, nur noch versilbert. Den Rest des Beitrags lesen »

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