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  • #46
    Originally posted by Colon
    Oh ok, now I get your point. That's true, but that implies Japan's deflation is "positive", it's caused by a more competitive environment and technological change, thus only transitional. (such bouts of deflation occured frequently during the industrial revolution)
    And the result has always been service sector growth where there has been overall growth. Japan was an exception for awhile because they didn't have competition, but those days are over, and I don't see them coming back.
    I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
    - Justice Brett Kavanaugh

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    • #47
      The BBC reports that the US rate of inflation, excluding volitile food and energy, was 1.5%. The lowest rate since 1966 but still not the deflation some people were worried about.
      Try http://wordforge.net/index.php for discussion and debate.

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      • #48
        Originally posted by Kidicious


        Are you looking at things from a micro point of view? Sure it's better for the individual firm to pursue higher profit, but what about the economy as a whole. In order for the Japanese economy to be grow further it will have to develope a service sector comparable to that of the US. The whole is greater than the sum of the parts.
        I don't get your point. GDP is the total of all created added value, are you saying that once an economy reaches a "right" ratio of services/GDP some sort of hidden added value is unlocked?
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        • #49
          Originally posted by Oerdin
          The BBC reports that the US rate of inflation, excluding volitile food and energy, was 1.5%. The lowest rate since 1966 but still not the deflation some people were worried about.
          We're in a period of disinflation right now. That means that deflation is a real danger though. The Fed wants to target the inflation rate at about 3%, so the inaction is something to worry about. They may expect the inflation rate to return to normal on its own if the economy picks up. If the economy doesn't pick up then deflation is a very real possibility. The consumer sentiment numbers look good though. Cross your fingers.
          I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
          - Justice Brett Kavanaugh

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          • #50
            Risks of deflation, risks..especially when monetary policy is near ineffective.
            www.my-piano.blogspot

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            • #51
              Originally posted by Colon
              I don't get your point. GDP is the total of all created added value, are you saying that once an economy reaches a "right" ratio of services/GDP some sort of hidden added value is unlocked?
              I'm saying that even if Japanese companies could get into higher profit manufacturing industries in the short run that in the long run they will have to have growth in their service sector for their economy to grow. Service is where the growth is. There is a glut in manufacturing. True that you can make good profit at the high end, but that profit will decrease in the future because other countries are bound to follow that path.
              I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
              - Justice Brett Kavanaugh

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              • #52
                It doesn't seem all that bad IMHO, a net income of 963mn USD

                On turnover of $63 billion? Hmmm... I guess we have different expectations.

                That's true, but that implies Japan's deflation is "positive", it's caused by a more competitive environment and technological change, thus only transitional. (such bouts of deflation occured frequently during the industrial revolution)

                Good point. That is implied in my position. I guess if that were Japan's only "problem", then you could look at it as good. But Japan has a lot of problems that hang on deflation, like real estate with values unrelated to reality, bad loans, etc.

                I guess you could argue that Japan just needs to hang in there through the transitionary period (that appears to be the Japanese position). But the period seems like a longer process to me. They're markets are being cannabalized by the Chinese now, but the Indians are going to be going through the Chinese process soon too.
                I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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                • #53
                  Originally posted by Boddington's
                  Risks of deflation, risks..especially when monetary policy is near ineffective.
                  We don't know if it is ineffective in the US yet. Just because it may be ineffective in Japan doesn't mean the same for the US. Monetary policy is generally more effective in the US than it is in the rest of the world.
                  I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
                  - Justice Brett Kavanaugh

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                  • #54
                    Originally posted by DanS
                    On turnover of $63 billion? Hmmm... I guess we have different expectations.
                    I did say considering the economic situation, otherwise it probably would have been better. And its competitors have been doing worse. For instance, Philips made a loss of 3bn € last year and it's cash flow from operating activities was only 2.2bn €.

                    Any American companies in consumer electronics you can compare to Sony? (and as I already said, MS seems to be making a loss with consoles, whereas Sony isn't - that wasn't just a jibe you know )

                    Good point. That is implied in my position. I guess if that were Japan's only "problem", then you could look at it as good. But Japan has a lot of problems that hang on deflation, like real estate with values unrelated to reality, bad loans, etc.

                    I guess you could argue that Japan just needs to hang in there through the transitionary period (that appears to be the Japanese position). But the period seems like a longer process to me. They're markets are being cannabalized by the Chinese now, but the Indians are going to be going through the Chinese process soon too.
                    Actually, I don't think foreign competition on its own has a lot to do with it, there's just a whole a lot of oversupply floating in the economy because 'zombie' corporations are kept alive, which is turn is linked to the institutional gridlock centered around the LDP.

                    Besides, the Indians are in other businesses, software, pharma, call-centers, backoffice services... the kind of stuff the US is so good at.
                    DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.

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                    • #55
                      for instance Philips made a loss of 3bn € last year and it's cash flow from operating activities was only 2.2bn €.

                      Well, yeh. But Philips was making silly amounts of money only a couple of years ago--a money mint. Has Sony ever made silly amounts of money? Certainly not in the last five years -- the highest net after taxes being $1.7 billion.

                      Any American companies in consumer electronics you can compare to Sony?

                      General Electric.

                      there's just a whole a lot of oversupply floating in the economy because 'zombie' corporations are kept alive, which is turn is caused by the institutional gridlock centered around the LDP

                      There is that. True. You could make the argument that the manufacturing weakness just exacerbates the problem. Some of their economy just makes me shake my head. Like the extremely large construction industry, as I have mentioned before.

                      Besides, the Indians are in other businesses, software, pharma, call-centers, backoffice services... the kind of stuff the US is so good at.

                      The Indians are good at a lot of things. I'm more bullish on India than on China long-term. And yes, I agree that they represent a big challenge to the US in a way that others don't.
                      Last edited by DanS; May 17, 2003, 17:08.
                      I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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                      • #56
                        Originally posted by DanS
                        Well, yeh. But Philips was making silly amounts of money only a couple of years ago--a money mint. Has Sony ever made silly amounts of money? Certainly not in the last five years -- the highest net after taxes being $1.7 billion.
                        https://www.investor.philips.com/reports/02_AR_i/sendfile.php?f=ManagementReport_AR02.pdf


                        Only a third of Philip's sales is in consumer electronics (the rest of it consisting of lighting, semiconductors, components, medical equipment etc) and it's operating profits was only 230mn € on sales of 9.6bn €.
                        Their consumer electronics division has been problematic for quite some time.

                        BTW, somewhere in the 90's, they also launched a console that was an utter failure, so as far that goes, they failed the test.

                        General Electric.
                        Their consumer product division had revenues of 8.5bn $ and profits of 500m $ in 2002. That's not fabulous either, considering their home market has been a heaven of consumerism.

                        There is that. True. You could make the argument that the manufacturing weakness just exacerbates the problem. Some of their economy just makes me shake my head. Like the extremely large construction industry, as I have mentioned before.
                        I think it just exacerbates the problem, normally speaking they should be able to deal with it, like the US and Europe were able to do so.
                        The catastrophe that the construction sector is, is directly linked to the LDP IMO.

                        The Indians are good at a lot of things. I'm more bullish on India than on China long-term. And yes, I agree that they represent a big challenge to the US in a way that others don't.
                        I agree with you. China is taking a traditional route through manufacturing, India is just skipping a whole phase.
                        DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.

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                        • #57
                          In the latest news the IMF has published a report where it claims Germany, hong Kong, and Taiwan are all are "High Risk" to entering a deflationary spiral. Supposedly, Germany is worst off since it suffers from policy constraints which prevent defict spending and its companies are burdened by combersume regulations.

                          Here is the BBC article on the subject. BTW Japan doesn't look like it will be reversing its deflation any time soon.
                          Try http://wordforge.net/index.php for discussion and debate.

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                          • #58
                            Also, Japan just nationalized its #4 bank, Resona.

                            http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1051390111637&p=1012571727313


                            Colon: Re Philips, you should include much of the semiconductors business in its consumer electronics division.

                            Re GE, yeh it's sort of a weak comparison, but it's the best I could do! American companies know better than to get into money-losing businesses!
                            I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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                            • #59
                              BTW, the IMF gave the US, the UK, China, and the rest of the eurozone the all clear. So no worries about deflation in those markets according to them.
                              Try http://wordforge.net/index.php for discussion and debate.

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                              • #60
                                Here's a radical thought. The Japanese economy is fine. Sures there's no GDP growth, but unemployment is only 5.5%. It's not like the problems the US economy went through in the 30s and 70s.

                                I was in Tokyo in Japan last week. Things look better there compared to a lot of Western economies that I;ve seen recently.

                                Maybe we put too much emphasis on economic growth.

                                I mean who is doing better? The US with its great GDP growth in the 90s, but stagnant wages for the majority and extensive poverty levels or the Japanese who don't have any slums and have a high level of education?
                                Golfing since 67

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