Japan (and its Real-Estate market) Rides Again

Fall In Japan Auto Sales Dashes Earlier Hopes Of Sales Turnaround

A fall in Japan's auto sales in May dashed hopes that an increase in sales the previous month finally marked the start of a new upward trend amid growing hopes that the government's economic policies will breathe new life into slack auto demand.

Last year, huge government subsidies had inflated sales, and now there is a price to pay, as there always is for subsidies.

This can't be right. My mate Ziv says it's all a box of fluffy ducks and Abe san will be a legend soon.

When I look back at the historical record and it shows…

didn't work..

didn't work again..

bugger still didn't work that time..

well I kinda come to the conclusion that's it's a 99.9% certainty it ain't gonna work this time.

You on the other hand believe you haven't got a clue (I agree) and that after repeated failures it's not certain this time will be a failure also. If you don't have a clue it's a stretch to deduce the evidence is uncertain especially when precedent and examples exist.

Your logic constantly fails you as in this case. You admit to not understanding (don't have a clue). If you don't understand then you lack the ability to judge if someone else does or not. That's like telling a mathematician his formula is wrong when you don't understand the formula.

You're kidding me right? 3 arrows consists of 1/ borrow more money to stimulate (QE) 2/ devalue the currency by monetising debt and 3/ market reform.

The 3rd I can go with but it's not scheduled to start until 2015 at this stage providing they can get the reform in the shape they want it. My guess is that what they want and what they end up with will depend on what concessions he will have to accept in order to achieve some sort of outcome. In politics the end result of major reform rarely resembles the original goal. The MRRT in Australia and Obamacare in the US are prime examples of trying to challenge the corporate oligolpoly.

QE and currency debasement… well nothing unique or dynamic about that either. Every major CB is chasing the same strategy with same result.

But of course Japan is different

Maybe for you but not for me. Economies have always been complex beasts if you want to dissect them down to minutia. However economics is based on simple fundamentals that even a child can understand. The only thing unique at this time is the scale of this baby – truly global.  Implementation – well that's not going to well. Yes the extent is different. A financial  banzai charge if ever I saw one. The measures hardly vary at all. They've learnt heaps off of the FED over the years. Trouble is they're trying to do similar things with disproportionate measures without a reserve currency backstop.

Does in the math's book I'm reading – perhaps you have a different maths book.

Interesting assumption. You believe we're not smart enough to speculate with any accuracy on a future outcome yet you're quite happy to follow an amateur with no real experience or expertise at much at all and proclaim his plan worth supporting even though there exists plenty of historical evidence to, at the very least, suggest the chances of success are extremely low and that failure would almost certainly mean a considerably worse situation than exists now.

I don't pretend Ziv.  A more apt description might indicate I'm speculating based on past experience, historical evidence, sound money practice and the opinion of those more knowledgeable with supporting track records.

Don't like those graphs do you Ziv. They constantly punch holes in your arguments that are difficult to refute.

I used to race pigeons when I was kid. Did alright too. I know a fair bit about them. I'm operating from a broad knowledgebase. 

Why not. Almost all planning is based on predictive outcomes based on historical experience. You invest in property because you have historical experience and rules derived from that experience. The outcome is predictive based on the likelihood of known factors. Risk will form part of that assessment and provide you with odds of success and to what degree. You embark upon a strategy when either the odds favor you or the reward out weighs the risk.

If you where a developer you wouldn't borrow money and start the process without first obtaining the requisite consents or changing the zoning. 

Abe's plan is a simple breakout strategy but it hinges on market reforms that could take multiple govt terms to get over the line. So why go for the doctor now financially when you haven't got your zoning and consents in place first. 

Strategies that are simple have the higher success rates. The more complex things get then your chance of success can deteriorate exponentially. Everything I've seen so far suggest a simple strategy that is being implemented in an ad hoc fashion without too much thought on how to deal with the volatile aspects of the plan. The BOJ is lurching from one crises to another trying to hold markets together but then admits it's communications with the market are disjointed and schizophrenic.

Ziv I suppose I'm a contrarian. Contrarians tend to challenge mainstream thought and behavior from time to time. I believe we live in a time that may in the future be described as a watershed moment for human civilisation. We face huge challenges from population growth, global warming and what appears to be the end period of a macro economic cycle.

We haven't shown in the past a propensity to handle significant events very well. The worst stressors tend to end in conflict. In the last decade there's little I can find that leads me to believe we are on top of our problems. In fact all I see is the opposite. 

A comment I thought pertinent to this discussion.. from Joseph Stiglitz Was Right: Suicide

In 2012, talking of the European Union’s austerity plans, Stiglitz had just one word to say. It was “suicide-pact”. He went on to say last year that imposing austerity on the citizens of the EU would do nothing more than lead to the collapse of the economies of those very same countries. Nobody listened to him then and nobody is listening to those words now.

Politicians today in the EU are so hell-bent on retaining power that they have transformed themselves into economists, without any ability or reason. Politics is the governing element that will lead to the downfall of our economic structures because we are governed by flawed responses from people that have no idea what economics is about.

Hey Freckle Juice,

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I found an interesting note in the news link below, that over 7 million of Japan’s properties are vacant ( 10% )

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http://www.abc.net.au/news/2013-06-05/japans-oldest-community/4736256

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That’s a pretty high figure !