Tuesday June 16, 2009

Japan GDP contracted record 14.2% in Q1 2009 on exports fall

bloomberg.com :

Japan's GDP shrank at a record 14.2% annual pace in Q1 2009, the worst contraction since the government began keeping records in 1955. Demand from China's $586 billion stimulus is helping to stabilize exports. Japanese Prime Minister Taro Aso's record stimulus spending has led to rising consumer confidence; sales of electronics are up 20% since the government introduced a program to buying of eco-friendly products. Tax breaks on energy-efficient vehicles have helped Honda post higher sales.

Still, manufacturers are only using about half their productive capacity because of the collapse in global demand. Exports have fallen by more than a third from last year and managers are under pressure to cut jobs and delay investments, which could cause the economy to start shrinking again as the effects of the stimulus wanes.

- Like Jim Puplava says on his show, "less bad is the new good". The GDP figures are every bit as horrible as the contrarian community said they would be. Countries are beginning to hit the 10% GDP contraction figure that demarcates Second Great Depression territory, but if you have been paying any bit of attention to the news these days, it sounds like that is in the past already, consigned to history as the "green shoots of recovery" burst forth.

Me, I'd give it a year or so. This time next year. Say around May to June 2010. From what I gather so far, chances are this time period might be a good time for the "Second L" to come down. The second downleg, the Double L theory, call it what you will. Then we'll see how the GDP figures are at that time. Only if these "green shoots" take root, then I'd be somewhat impressed. Keep posted.

See also :

1. Japan middle-class shrinks
2. Japan GDP shrinks 12.7% in biggest dive since 1974 as exports collapse
3. Japan exports fell 49.4% in Feb 2009 to record low on global economic collapse

(2009-06-16 23:26:02 SGT) [Biz] Permalink Comments [1]

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