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How is Japan Relevant to U.S.?
Paul Kedrosky's Infectious Greed —
... for a public/private partnership, to purchase toxic assets, look hopeless. Even if it can be made to work operationally, the prices are likely to be too low to encourage banks to sell or to represent a big taxpayer subsidy to buyers, sellers, or both. Far more important, it is unlikely that modestly raising prices of a range of bad assets will recapitalise damaged institutions. In the end, reality will come out. But that may follow a lengthy pretence. More here.
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"Japan's Lessons for Balance-Sheet Deflation"
Economist's View —
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Japan’s lessons for a world of balance-sheet deflation, by Martin Wolf,
Commentary, Financial Times: What has Japan’s “lost decade” to teach us? ...
Welcome to the world of balance-sheet deflation. ...
Martin Wolf: Rethinking the Lessons of Japan's Debt Unwind
naked capitalism —
... Martin Wolf is in particularly fine form today, and offers a reassessment of Japan's lost decade. On the whole, the implications are not good. Wolf starts by focusing on an issue ignored by most economists. Downturns are not created equal. What Richard Koo calls balance sheet recessions, that is, ones which feature excessive leverage, are much nastier beasts. This would seem to be an obvious point, yet is overlooked in many analyses. From the Financial Times: ...,those who argue that the Japanese government’s fiscal expansion failed are, ...
More ‘lessons from Japan’
FT Alphaville —
Martin Wolf is in “particularly fine form” in his reassessment of Japan’s lost decade , as Naked Capitalism’s Yves Smith notes on Wednesday, adding - quite rightly - that on the whole, “the implications are not good”. Wolf starts by focusing on an issue ignored by most economists. Downturns are not created equal. What Richard Koo calls balance sheet recessions, that is, ones which feature excessive leverage, are much nastier beasts. This would seem to be an obvious point, yet is overlooked in many analyses. The counter-intuitive prognosis that Japan triumphed ...
japan was successful
Decline and Fall of Western Civilization —
martin wolf in today's financial times makes what is from my perspective a nearly perfect assessment of japan since 1989 and its relevance to our current situation. i copy it here in toto with while admonishing you, dear reader, to subscribe to the financial times. my caveats follow. ...
Lunchtime Links 2-18
Rolfe Winkler —
... Japan’s lessons for a world of balance sheet deflation (FT) Martin Wolf chimes in with an interesting piece as always. Concludes that fiscal stimulus is the only way to soften the blow. What about the bond market, Martin? Longer-term, isn’t so much deficit spending only going to raise interest rates? ...
Krugman, Stats Guy and the ‘Japan parallel’
FT Alphaville —
... no other country can follow. We, as the reserve currency, are litterally [sic] killing the world and ourselves - and this banking fiasco fixes nothing. And as to fears of Latin-America-like hyperinflation - the key difference is that our debt is denominated in dollars. So when we devalue, we do not increase our debt load like poor Argentina. Do it now, or pay a vastly worse price when the US defaults in 5 to 10 years. Related links: More lessons from Japan - FT Alphaville Martin Wolf: Japan’s lessons for a world of balance-sheet deflation - FT Rethinking the ...
Japan ‘doesn’t look that bad’, really…
FT Alphaville —
... The strong yen, plus falling interest rates and squelched dividends, slashed net investment income in January to $10bn, two-thirds last year’s amount. This is bad news for Japan. In fact, noted one seasoned Japan-watcher, while everyone else is going on about how other countries are beginning to resemble Japan, Japan itself is beginning to look more like Japan every day… Related links: Japan reconsidered - NYT Krugman blog Japan until further notice - FT Alphaville Martin Wolf: Japan’s lessons for a world of balance-sheet deflation - FT Rethinking the ...
