Jared Diamond: Three Reasons Japan’s Economic Pain Is Getting Worse

Jared Diamond, author of Collapse: How Societies Choose to Fail or Succeed (and others), covered the deteriorating situation in Japan for Bloomberg:

Japan’s economic problems are serious and getting worse. Foremost among them is the crushing burden of government debt.

Japan’s ratio of government debt to gross domestic product, currently about 2.28, . . .

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Montier: What Goes Up Must Come Down!

James Montier’s (author of the excellent Value Investing: Tools and Techniques for Intelligent Investment) monthly commentary has been released, courtesy of ZeroHedge: What Goes Up Must Come Down! [pdf]. This month he tackles the sustainability of record high corporate profit margins:

Currently, U.S. profi t margins are at record highs according to the NIPA data (see Exhibit 1). More freakish still is that these record high profit margins are coming during the weakest economic recovery in post-war history.

. . .

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Japan Slowly Awakening to Debt Situation

From Reuters over the weekend, we find an article on Japan’s worsening debt situation (seemingly confirming Hugh Hendry’s arguments here). Here’s a snippet (emphasis added):

“It’s scary when you think what could happen if there’s triple-selling of bonds, stocks and the yen. The chance of this happening is bigger than markets think,” says a senior official.

Leaning back in a leather sofa in his office, the official appears relaxed, but the way he wastes no time answering questions . . .

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Hugh Hendry on China, Japan and Hyperdeflation

I’ll just say this straight out: you really need to know who Hugh Hendry is and, at the very least, consider what he’s saying. He has a brash style which maybe turns some people off, but don’t let that cause you to dismiss what he is saying. His message is important. Really important. The short story is that the global economy is nowhere near being out of the woods, and there are a (huge) number of unresolved issues that all . . .

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Japan’s “Lost Decade” a Myth?

Former editor of the Financial Times and Forbes, Eamonn Fingleton, writes in The New York Times questioning Japan’s “lost decade.” He provides some context with data not usually discussed:

How can the reality and the image be so different? And can the United States learn from Japan’s experience?

It is true that Japanese housing prices have never returned to the ludicrous highs they briefly touched in the wild final stage of the boom. Neither has the Tokyo stock market.

. . .

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