Tuesday, March 24, 2009

Stunning Drop in Japanese Exports...

The numbers on the drop off of Japan’s exports, particularly to the United States is STUNNING…
Japan Exports Drop Record 49% as Global Slump Deepens (Update3)

By Jason Clenfield

March 25 (Bloomberg) -- Japan’s exports plunged a record 49.4 percent in February as deepening recessions in the U.S. and Europe sapped demand for the country’s cars and electronics.

Shipments to the U.S., the country’s biggest market, tumbled an unprecedented 58.4 percent from a year earlier, the Finance Ministry said today in Tokyo. Automobile exports tumbled 70.9 percent.

The collapse signals gross domestic product may shrink this quarter at a similar pace to the annualized 12.1 percent contraction posted in the previous three months, the sharpest since 1974. Prime Minister Taro Aso is compiling his third stimulus package as companies from Toyota Motor Corp. to Panasonic Corp. fire thousands of workers.

Last month’s drop in exports was the sharpest since at least 1980, when the government started to keep comparable data. Economists predicted a 47.6 percent decline.

Toyota, forecasting its first net loss in 59 years, yesterday said overseas shipments plunged 69 percent in February.

Demand fell across all regions. Exports to Europe dropped a record 54.7 percent, shipments to Asia declined 46.3 percent and goods sent to China slumped 39.7 percent.
Imports fell a record 43 percent, helping Japan post its first trade surplus in five months.

Finance Minister Kaoru Yosano said on March 22 that a new stimulus package of as much as 20 trillion yen, double the amount pledged since October, is “not out of line” as the world’s second-biggest economy heads for its worst recession since 1945. The spending would add to public debt already estimated at 170 percent of gross domestic product.

Now that’s what I call cliff diving numbers. Japan’s debt load is gigantic from attempts to save their banking industry nearly twenty years ago now. Despite lowering rates to zero and flooding the country with Yen, they are now only deeper in debt with worse economic problems than ever. Of course they went into their situation with savings and strong global economy. We won’t be so fortunate, and we are making almost all the same mistakes, only worse.

So, if Japan’s exports to the U.S. are down 58% yoy in February, what does that say about the health of our economy? At our current rate of money pumping, how long until we're announcing $20 TRILLION stimulus plans? Let's see, with exponential growth, that's what, about 3 more months?