Japan's `Least Ugly' Economy May Outpace U.S., Europe in Financial Crisis

[marmar]

Japan's `Least Ugly' Economy May Beat U.S., Europe in Crisis

By Jason Clenfield

Nov. 18 (Bloomberg) -- Japan's newly declared recession may be a chance to show that the world's second-largest economy can finally outperform the U.S. and Europe.

As the West faces the worst financial crisis since the Great Depression, Japan will contract at a fraction of the pace of its major counterparts next year, according to the Organization for Economic Cooperation and Development.

Almost two decades of sub-par growth and an aversion to business and consumer debt have produced a leaner economy. The country's banks are cash-rich and still able to lend, exporting manufacturers such as Toyota Motor Corp. have increased their efficiency and households have a mountain of savings that should buoy spending during the downturn.

``The economy, corporations and households have been through a process of restructuring,'' said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. ``Japan doesn't have to recalibrate its economy as much as the others because it wasn't flying that high.''

In 2009, Japan's gross domestic product will fall 0.1 percent, compared with shrinkage of 0.9 percent in the U.S. and 0.5 percent in the euro countries, according to the OECD. There was no comparable forecast for the U.K., where the Confederation of British Industry predicts a 1.7 percent drop in GDP.

GDP shrank 0.1 percent in the quarter ending Sept. 30 from the previous period, the Cabinet Office said yesterday. That compares with a 0.2 contraction in the 15-nation euro region and a bit less than 0.1 percent in the U.S. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601109&sid=aq0Je8ySdG3A&refer=home

[DJ13]

1. "Im already on the ground. When they hit the ground I'll look like a genius!"

[ellaydubya]

2. Is it true that we are more in debt to Japan than China!?!?!?!?

I read this in the Parade magazine weekend before last and was very surprised since I assumed it would be China!?!?!?!? This is quite shocking! What in the world - we owe more to Japan than China!?!?!?! We are more screwed than I imagined!! Can anyone give me a little more background on this!!! All we here is China, China, China, BUT we owe Japan more!?!?!?

[gravity]

4. US bonds pay higher interest than Japanese bonds

It isn't surprising that they will own a lot of our debt

[Idealism]

5. Misleading claim I think

When it says we owe more to Japan than China, we aren't truly borrowing from the governments themselves, rather rich investors who buy up treasury bonds (measures of our debts) if im not mistaken. So perhaps when this article was written, many Japanese investors had bought up our treasury bonds because Japan has credit to lend and no one else seems to, then it could be technically true. From what I have read, most of what we owe varies on a month-to-month basis to China,Japan, and Saudi Arabia.

[buzzard]

6. This is the latest I can find.n/t

http://www.ustreas.gov/tic/mfh.txt

[On the Road]

7. It's Been Japan for a Very Long Time

China is growing more quickly. Here's a list of all the foreign debt holders. Most of the debt is actually held domestically.

http://www.treas.gov/tic/mfh.txt

[Art_from_Ark]

8. If we owe Japan more, count your blessings

The Japanese are not going to do anything rash to sink the American ship.

[Art_from_Ark]

3. The Japanese economy WAS outperforming the US and Europe

in the 1980s (remember Japan-bashing?), but the door was slammed in Japan's face with the abrupt revaluation of the yen resulting from the Plaza Accord, trade frictions that forced Japan to "voluntarily" limit exports, its own bank meltdown in the early '90s, and its own real estate bubble. But the Japanese seem to be more adaptable to economic adversity, or, the figures bandied about in the West don't apply in the same way to Japan, in part because of the savings rate, and the reluctance of Japanese companies to start pink slipping employees at every downturn.

[JCMach1]

9. You are correct... they already dealt with their real estate bubble

Europe is REALLY in for it as most places are highly inflated in the eurozone.