US and the impact on Asian markets

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krogoth's picture
krogoth
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US and the impact on Asian markets

It seems amazing that the events of American politicians, IE opening the door to these easy mortgages that anyone can get causing this housing bubble, is hammering the Asian areas of the world as well. I have come up with some reasons why this is being caused, and anyone can add based on what they think.

(1) Oil prices- This has a direct impact on people globally and quickly, hitting everything from food supply to industrial production. You think in a good world OPEC would lower prices dramatically in a time of crisis like this, but they are as bad or worse then the worldwide bankers. OPEC is like drug dealers, giving us the drug we need most at any cost, oil

(2) Consumer Confidence Index in America- This is a bad thing for exporters like China, who produce less because America (the biggest buyer of imported goods) and the world of course buying less. Poison milk additives is not helping China BTW 

(3) Bad Toxic Loan purchases through investment- Any investment in these bad loans from the past with Asian banks is certain doom

 

The Japanese economic situation is a Blueprint for what America is becoming. High unemployment, tight credit and high inflation. I welcome any comments from users here about other reasons you think this will be hitting major Asian countries or producers- India, China, Japan, Taiwan, Korea, Vietnam etc. 

 

OK let's dust the cobwebs off this region of the forum and add some content. All people living or dealing with Asian countries please comment how your situation is or what you think it will be in the future. Thanks.

 

HarryFlashman's picture
HarryFlashman
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Japan

Krogoth,

 If I understand the way you're talking about the Japanese economy you have it arse-roads about mate.

 Yes,Japan did have a decade and a half of non -performing bank loans,but it hasn't had anything even approaching inflation for the same length of time,it's been the opposite, DEFLATION with zero,negative or very low growth-Stagdeflation.Unemployment has been pretty steady and pretty low(I think).This whole thing suits the older end of the Japanese population as they're on a fixed income so their purchasing power was growing.Inflation has just restarted here,due to high oil prices I think(my 2kg bag of chicken breasts has nearly doubled in price in the last couple of months).

 

Tight credit??????????? What papers have you been reading???? The interest rate here has been basically zero for about 10 years!!!! Ever heard of the Yen carry trade??? The slight tightening of credit (to about 1%) killed that a bit and that is one of the reasons for the global slowdown.

 A little more economic literacy would be in order before you post mate.

krogoth's picture
krogoth
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Japan
Sorry you feel so strongly about this that you feel insults need to be slung. I am overseas in Taiwan and China on business alot and simply going by what my Japanese friends tell me. Next time I will do more credible research so you don't need to be so rude, mate.
HarryFlashman's picture
HarryFlashman
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Rudeness perhaps but astonishment in a much more profound way

I'm assuming that you're American? If so don't read American media,it's corporate owned and biased beyond belief.

 Also don't listen to any Japanese people unless they've lived abroad for a long time,they're so insulated that they  think that crime is high in Japan! The biggest crime in Japan is bicycle theft!!! I kid you not.

 A little research would not go amiss.

Maenad's picture
Maenad
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Re: Rudeness perhaps but astonishment in a much more profound wa
Are you Australian? I ask because I am and your use of "mate" sounds either Aussie or British. I'd like to talk about the Australian situation which I don't think is being taken seriously enough by most people here.
HarryFlashman's picture
HarryFlashman
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Re: Rudeness perhaps but astonishment in a much more profound wa

Hi Maenad,

 

I'm British.Don't really know all that much about the Oz situation(though I have loads of Ozzy mates here in Japan).

 

As I understand things being an exporter of essential raw materials(Bauxite,Uranium etc) Australia is in a much better position to weather the present economic downturn than most,Chindia still need all those lovely metals and things like coal to grow even at a reduced rate.

 

The only problems I have though are with environmental stress to Australia's more agriculturally productive areas(Darwin River Basin depletion?) there's no way out of that mate ,not with all the climate shifts etc.So maybe no more exports...?Australia SHOULD always be able to feed itself with it's reasonably small population and zillions of 'Zippy the bush Kangas'(showing my age.......) and a vast ,albeit somewhat uninhabitable continent.

 

My Crystal Ball tells me that The Anzacs will do best out of the 'peak everything' thing as they are the least depleted.

 

Thinking of emigrating to N.Z. myself,Oz a bit hot for my tastes!

JMCSwan's picture
JMCSwan
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Re: Preference for 'Saving Face' from 'Insults'; or Honesty?

Krogoth (Mon, 10/06/2008 - 15:37)

Sorry you feel so strongly about this that you feel insults need to be slung. I am overseas in Taiwan and China on business alot and simply going by what my Japanese friends tell me. Next time I will do more credible research so you don't need to be so rude, mate.

I'm really not sure what you found offensive, or insulting about his response.

I FOUND IT VERY, VERY REFRESHINGLY HONEST, AND FRANK.... LIKE A BREATH OF FRESH AIR -- OH, FINALLY SOMEONE SPEAKING THEIR MIND....

Unless your 'insult' comes from your Japanese type of EGO, where you DON'T LIKE HONESTY, especially if someone disagrees with you -- YOU PREFER THAT THEY LIE IN RESPONSE TO YOU, TO SAVE YOU FACE???

If you think Americans are brainwashed..... well then you ain't seen nothing yet, if you compare them to Asian 'SAVING FACE' CULTURE........... POOR SUCKERS..

mainecooncat's picture
mainecooncat
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Incredulity, astonishment and outrage. Krogoth's not perfect.

Come on, guys, you can do better than this.

To Black Swan symbol dude and Harry Flashman: Writing in all caps and/or long strings of question marks and/or an over reliance on ellipses does not an argument make. In fact, I won't even bother arguing the point.

I've always found Krogoth's posts to be interesting and well-considered and the last thing I would consider him is a sheeple (if that is indeed the singular of sheeple) -- as you imply in your post, Black Swan. I mean, if Krogoth is a sheeple than we have to invent a new term for the average American. It has to be as pejorative as it can get, so maybe you can help in that department, Black Swan.

As far as the "tight credit" comment that elicited such incredulity from HarryFlashman, my reading of it is that that comment was describing unfolding conditions in the US. That credit is tightening in the US, not that it has been tight. But then I realized that "tight credit" was part of the Japanese blueprint he was also referring to, which is incorrect because of how low Japanese interest rates have been. However, couldn't interest rates be low but people not taking advantage of them through elevated levels of actual borrowing? And couldn't interest rates be low but credit still be tight in the sense that banks maintain stringent lending standards simultaneously with low rates? (These are non-sarcastic, non-ironic questions by the way.)

I'd like to respectfully and maturely disagree with a couple of your points, Krogoth, in a later post.

mainecooncat's picture
mainecooncat
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OPEC shouldn't lower prices
[quote=krogoth]

(1) Oil prices- This has a direct impact on people globally and quickly, hitting everything from food supply to industrial production. You think in a good world OPEC would lower prices dramatically in a time of crisis like this, but they are as bad or worse then the worldwide bankers. OPEC is like drug dealers, giving us the drug we need most at any cost, oil

[/quote]

 

I don't believe OPEC should dramatically lower oil prices.

First, a couple of questions.

I know this probably sounds terribly naive, but wouldn't lowering prices just because there's a crisis be market manipulation? (This question does not imply that there isn't already market manipulation)

Is it OPEC's role to keep us awash in affordable product or just to do business as business does?

But the real issue here for me is that oil, if anything, is too cheap. It's price isn't reflective of its importance to humankind. Do people believe (not you Krogoth but people in general) that oil will be "cheap" right up to the day the last drops flow? Oil at $147/barrel was a great thing, that's what finally led to lifestyle changes in the US that produced massive drop-offs in consumption. Only if it stays that high will the fire under our arses be hot enough to go down the path we need to go down.

Surely, Krogoth, you don't believe OPEC should artificially lower prices so that "growth" can resume?

One more thing, one could argue that oil prices are already artifically low, whether that price be $60/barrel or $110/barrel. I think what happened was that the collective international financial elite realized that at almost $150/barrel the economic world would grind to a halt and (at least compared to our current way of life) chaos would be unleashed on a global scale, so they manipualted prices lower for the sake of their own continued existence.

What's interesting is that now the collective international financial elite are engaging in their second symphony of manipulation through the "Paulson plan," "capital injections," and other cynically and euphemistically named programs.

It can't be a good sign when the collective international financial elite engage in two such gargantuan efforts in the time span of only a few months. Their quiver is quickly running out of arrows me thinks.

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JMCSwan
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Re: Incredulity, astonishment and outrage....

Don't know who Black Swan is?

Ain't seen anyone by that name. As I said:

Is your preference for 'SAVING FACE' from alleged 'INSULTS'?; or for HONESTY?

Until I receive a reply, that you are INDEED INTERESTED IN HONESTY; you are welcome to continue SAVING FACE.  

I have much better and interesting things to do.....

Let me know when you make up your minds -- if ever; it's clear there are plenty of cowards, convinced they are 'humans' in this world; that would make the average sheep appear downright intelligent.

JMCSwan

 

 

Maenad's picture
Maenad
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Re: Rudeness perhaps but astonishment in a much more profound wa

Thanks for the reply. Just FYI my interest has always been in culture. I've just finished a BA majoring in Anthropology and Religions so I'm learning a lot from this site about economics.

The climate change situation has been very noticable over the last few years. The Christmas Day before last there was snow in the Victorian hills i.e. a few days past the summer solstice! And last year New Zealand had iceburgs that had broken off the polar cap floating within miles of the south island which had never happened before. My ex who works for the EPA in Sydney used to say that if you like the weather in Sydney, move to Tasmania 'cause that's where it'll be in 10 years.

I'm hoping that you're right about Oz being the least depleated of resources. You are probably right about that. Back in the early 1990s I was working for Greenpeace [showing my age now Wink] and they got us to watch a film on what would hypothetically happen if the world carried on as it had been. It had Australia being invaded from the north by the more populous countries as they ran out of room and necessities. Indonesia has been seen as a serious threat for decades and these days the Muslim extremists HATE us as a little America in their part of the world. I've heard that a lot of people outside of Australia don't realise just how much of Australia is uninhabitable. With droughts from the El Nino effect going on for years, the dams of the south east are down around 40% IIRC. So we've been on water restrictions for years already.

What concerns me now is if the US is as screwed as the Crash Course tells us it is, then they're not going to be able to fulfill their defense agreement with Australia and frankly, we depend on that. Our defence forces are very highly trained but they're still tiny in number and the civilians are not armed, trained or in any way of a military mindset these days.

Y'know, I knew these things were linked, I knew economies go in cycles and that the US was heading for a big bust but now it's here I'm still blown away by the enormity of it.

 

 

jrf29's picture
jrf29
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Re: US and the impact on Asian markets

HarryFlashman and Black Sludge Covered Swan, what on EARTH is the matter with you?!

Harry 'mate', why critisize somebody for posting an idea? By posting imperfect ideas a good conversation can get started. You understand, if people only posted incontrovertible facts such as "HarryFlashman is an impolite dipweed," then there would be no net gain of knowledge. The idea is to encourage people to contribute, and then to contribute your own ideas which might be better.

Discouraging others from posting imperfect ideas reduces the number of opportunities for you to reply to them better information, and for other people to benefit from your information, which, for a pretentious narcisist who lives to tell others how much they know, can be a real problem in the long-run.

And Swan Guy: I have seen several of your posts before. You are apparenty a racist, slightly mentally unstable individual who probably should be blocked from this site. If you have "better things to do," then you ought to go do them, because writing here certainly isn't one of your better things. You are an example of the sludge that seems to bubble up from the drainpipes and infest intelligent discussions when they are opened to the public.  It pains me to know that, under our system of government, people such as yourself can vote. 

If either of you were actually experts in your fields, you would be writing peer-reviewed articles in respectable academic publications, where, you might find, people are civil to each other. Since you are not experts, you have no business insulting others.

krogoth's picture
krogoth
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Re: OPEC shouldn't lower prices

Before I posted my original topic, oil was still up. Now it's dropping dramatically. Probably as a result of the American elections or lowering demand. I stated that OPEC should lower prices because of the state the economy is in, not as a permanent solution. I have already read that they will be cutting supply to raise prices once again. I feel that lower oil for the time being would be a benefit for the economy and prices for the next 1-2 years. I personally feel bad about the prices when they were higher because it effected so many middle and poorer people in the US and around the world. In the long run I hope prices skyrocket, forcing us to move quicker into alternative means of energy worldwide. Also the result of moving off or reducing oil dependency will greatly improve the environment.

 

As for the other posts, this is a free board with a free opinion for everyone. I was going on what I gathered from my Japanese friends, so I don't need to respond to posts I feel are basically rude, and that's my right here. Sorry I didn't respond earlier to this thread, but my new baby daughter was born last week and I have been pretty busy lately.

 

 

 

 

jrf29's picture
jrf29
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Posts: 453
Re: US and the impact on Asian markets

I think that the volatility in energy prices is doing harm to our long-term energy preparedness, and I would argue that lower prices now, coupled with skyrocketing prices in the future, are a far more damaging scenario than steadily increasing prices with lower volatility.  The short-term bust of the commodities bubble has cut the legs out from underneath many projects to develop new oil-extraction technology, and other energy-related infrastructure improvements.  A short-term dip in oil prices now will not be good for the long-term economy, because lower prices will merely encourage further reliance on obsolete energy models, and if prices were to skyrocket in the future, leave the world less prepared than it could be. 

We are going to have to deal with higher petroleum prices in this generation.  I would rather take some pain now, so that long-term energy projects can become economically viable sooner rather than later.  Besides, a deflationary recession period is the perfect time to get to work on heavy infrastructure and energy projects.  If oil prices collapse during this recession, it will only guarantee that the next boom, when it comes, will be built on an energy model that can't last, and will ultimately doom the next economy to failure.  Except that when the next economy fails, we will have wasted even more time, and we may not then have the good luck of moderate energy and resource prices.

P.S. Congratulations krogoth on your new family member!

krogoth's picture
krogoth
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Posts: 576
Re: US and the impact on Asian markets

Thanks JRF29,

She's a big baby, 10lbs. , and my wife is Asian so the baby almost killed her, but mom and baby are fine. Thanks for the nice words.

 

 

 

 

 

 

 

 

Maenad's picture
Maenad
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Posts: 43
Re: US and the impact on Asian markets
Congratulations from me too. I hope all goes well from here on particularly with your wife's recovery. I have an eight week old baby who is trashing my sleep patterns, but at least I can see what's going on while the rest of Australia's sleeping.
joe2baba's picture
joe2baba
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Posts: 807
Re: US and the impact on Asian markets

CONGRATS KROG

my baby girl will be 30 in dec. so i know how you feel.

watching her be born was one of the most profound experiences of my 

life . she is my closest friend.

i wish you as much  happiness as i have had

all the best

om shanti

joe

calgapa's picture
calgapa
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Posts: 2
Re: US and the impact on Asian markets

On the comments about oil, I believe that the current price is a reflection of two things:  (1) the slowing demand in the US* and (2) the unwinding of all of those future trades by hedge funds.

I like mainecooncat believe that oil will not remain low for too long.  Opec is going to slash production because many of its members are loosing money at current prices.  Remember, all countries work with budgets and if they are a commodities exporter they tend to use a price projection.  In the case of most nations they used 70 to 80 bucks.  

America and the world need expensive oil so people can start adapting to a new lifestyle and so that alternative energy sources can be attractive to develop.

 

 

 

 

 

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