Tag Archives: Japan

Mer om Japans gjeld, herr Schuman ved Time.com forklarer.

Michael Schuman tar saken. Hvor komplekst er Japans gjeldssammenseting, og hva har tsunamien og atomusikkerheten å si, på bakgrunn av det man vet om gjeldssituasjonen. Det er komplisert, men her er noen punkter:

  1. Societe Generale i Tokyo estimerer at Japan må ut med ca. $60 mrd. (360 milliarder kroner) for å betale for skadene etter jordskjelvet. Dette er mindere enn 1% eksisterende gjeld, så ‘bare sett det på Visakortet’.
  2. Det var utgifter; et jordskjelv påvirker inntekter også. Lavere økonomisk vekst, lavere skatteinntekter til staten, sammen med økte utgifter på velferdstilbud gjør at gjelden ikke øker med 1% men med 10%. Japan har en gjeld på 200% av BNP fra før av. Men Ken Courtis tror heller ikke dette er et problem:
    • But Courtis also adds that that doesn’t necessarily mean Japan will have a debt crisis. First, he, like many others, believes Japan, the third-largest economy in the world, most likely has the resources to finance the costs of the quake on its own.
    • And that would perpetuate a highly unusual situation in Japan that allows the country to go on building a mountain of debt without suffering the usual punishment of the marketplace. Japan finances its debt almost entirely within Japan. Some 95% of Japan’s government bonds are held by locals. These loyal Japanese investors have continually bought government debt at low yields, allowing the state to finance its deficits at extremely tiny cost. ‘In a sense, this thing can continue forever,’ Courtis says.
  3. Men: ‘Perhaps Takahira Ogawa, director of sovereign and international public finance ratings at Standard & Poor’s explained the situation the best. S&P has been warning about the fragile state of Japan’s national finances for some time. The agency downgraded Japan’s credit rating in January. But since the quake, S&P has been relatively quiet, taking a wait and see approach to how the natural disaster will impact its fiscal situation. Ogawa says that it is just too difficult at this point to assess how heavily the costs of reconstruction will weigh on the government budget. Yet he warns that Japan’s deficit and debt problem still needs to be taken very seriously.’

Så det er ingen vil om at skjelvet ‘gjorde vondt verre’, på så mange måter. Men dette er ingen ‘liten tue, stort lass’ problem, gjeldsproblemene til Japan vil være der også etter at husene er gjenoppbygd, veiene reasfaltert og sorgen fordøyd.

A hard look at Japan’s debt problem – The Curious Capitalist – TIME.com: «Yesterday in this space, I asked if investors would come to reassess the riskiness of developed economies and usher in a ‘sea change’ in how money is allocated around the world. Could Japan, the most indebted of all industrialized countries, be the trigger to start that dramatic process? Since the devastating earthquake and tsunami that ravaged northeastern Japan last month, the pitiful financial state of Japan’s government has come into ever greater focus. The reconstruction could place an extra burden on an already strained budget, while it could be difficult for policymakers to undertake the badly needed retrenchment in deficits and spending with the economy slowing and disaster victims still in need of aid, nudging the country closer to a possible debt crisis.

But how vulnerable is Japan to such a crisis? The answer is amazingly complicated.

First, let’s look at how the natural disaster could weaken the government’s financial position. Christian Carrillo, head of Asia-Pacific interest rate strategy at Societe Generale in Tokyo estimates that the government will likely have to issue an additional 5 trillion yen in bonds this fiscal year due to the costs of the quake. At nearly $60 billion, that’s no pocket change. But Carrillo points out that it is also less than 1% of Japan’s total outstanding debt. So in the end, the direct increase of debt from the quake is something of a drop in a big bucket of liabilities. ‘The magnitude of the increase in funding requirements is minimal in regard to the public debt,’ Carrillo says. The quake may slightly heighten the risk of a debt problem, but only ‘on the margin,’ he adds.

Economist Ken Courtis, founding partner of private-equity firm Themes Investment Management, thinks the impact could be a bit more severe. He estimates that all of the related costs of the quake – rebuilding and extra social welfare expenses, lost tax revenue, slower economic growth – will add about 10 percentage points onto the country’s already astronomical government debt to GDP ratio, which at 200% is the highest in the industrialized world. But Courtis also adds that that doesn’t necessarily mean Japan will have a debt crisis. First, he, like many others, believes Japan, the third-largest economy in the world, most likely has the resources to finance the costs of the quake on its own. And that would perpetuate a highly unusual situation in Japan that allows the country to go on building a mountain of debt without suffering the usual punishment of the marketplace. Japan finances its debt almost entirely within Japan. Some 95% of Japan’s government bonds are held by locals. These loyal Japanese investors have continually bought government debt at low yields, allowing the state to finance its deficits at extremely tiny cost. ‘In a sense, this thing can continue forever,’ Courtis says. The only way this situation could change is if Japan is forced to borrow more from outsiders. That would make Japan’s position more akin to Greece’s or Ireland’s, which rely on foreign funds to finance their government’s needs, and force something of a ‘mark to market’ for Japanese debt – which means borrowing costs will likely go up. ‘If Japan has to borrow from the rest of the world, then you’ll have the focus on the debt issue,’ Courtis says.

What would cause that to happen? One scenario is that Japan’s consistent current account surpluses turn to deficits, causing the country to look beyond its shores for money. Another is that the Japanese themselves lose faith in the nation’s financial position and take their money out of the country. In other words, Japan can have a debt crisis only if the Japanese start one. Neither of those scenarios seems anything close to a possibility in the near or even medium term.

But does that mean that Japan will never have a debt crisis? The problem with the debt problem is that, left unresolved, it will just inevitably get worse, making it more and more likely over time that investor confidence, even Japanese confidence, could get shaken. David Rea, an economist at Capital Economics, points out that nearly half of the budget is bond issuance, and 25% of revenues is debt service. More debt means more pressure on the budget, taking the nation on a downward spiral. ‘It could get to the point where they do face tough choices,’ Rea says.

Perhaps Takahira Ogawa, director of sovereign and international public finance ratings at Standard & Poor’s explained the situation the best. S&P has been warning about the fragile state of Japan’s national finances for some time. The agency downgraded Japan’s credit rating in January. But since the quake, S&P has been relatively quiet, taking a wait and see approach to how the natural disaster will impact its fiscal situation. Ogawa says that it is just too difficult at this point to assess how heavily the costs of reconstruction will weigh on the government budget. Yet he warns that Japan’s deficit and debt problem still needs to be taken very seriously. He compares the debt situation to the tsunami that hit Japan. Everyone knew Japan was vulnerable to such a disaster, he says, but it was difficult to realize and understand the true extent of the danger until the disaster actually happened. The same could be true with Japan’s fiscal woes. ‘Everyone knows the danger of delay,’ Ogawa says. ‘But people don’t have a realistic view of the danger. Tomorrow may not be the same as today.’»

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Marius Gustavson vet forskjell på olje og vann. Det vil si gjeld og annen gjeld. I Japan.

Japan
Marius Gustafson har ett godt poeng i dagens kommentar.

Den japanske gjeldsutfordringen – Kommentarer – E24

Ser vi bort fra at det verste kan skje, er det mulig å gi et røft overslag av kostnader. Investeringsbanken Goldman Sachs har beregnet at totale ødeleggelser beløper seg på rundt 200 milliarder dollar, omtrent halvannen gang så mye som ved Kobe-jordskjelvet i 1995. Dette tilsvarer ca. fire prosent av BNP og 1 prosent av landets samlede formue.

Med andre ord, ikke uoverkommelige størrelser, slik Martin Wolf peker på i Financial Times.

Likevel mener flere kommentatorer, spesielt her i USA hvor jeg befinner meg, at de japanske statsfinansene allerede er strukket så langt at verken myndigheter eller økonomien er i stand til å betjene nye budsjettmessige utfordringer.

Dette synet baserer seg delvis på en misforståelse av hva som er årsak til de japanske økonomiske problemene de siste tjue årene og delvis på en falsk sammenligning av budsjettsituasjonen i ulike land.

Mens det er stor usikkerhet knyttet til budsjettunderskuddene i Europa og USA, er Japan et eksempel på at myndighetene kan pådra seg betydelige mengder gjeld uten at dette utløser en statsfinansiell krise eller presser rentene nevneverdig opp i obligasjonsmarkedet.

Fordi:

Forskjellen mellom Japan og andre land med høy statsgjeld, heriblant USA, Storbritannia og de vesteuropeiske periferilandene (PIIGS), er at mesteparten av gjelden er finansiert av hjemlige investorer. I følge tall fra det japanske finansdepartementet sitter ulike myndighetsorganer (heriblant sentralbanken og det statlige pensjonsfondet) på rundt 20 prosent av gjeldspapirene. Husholdningene besitter rundt 5 prosent, det samme omfanget som utenlandske investorer. Mesteparten av statsgjelden er finansiert av japanske finansselskaper—nærmere 70 prosent.

Det er alltid greit å spørre seg: «Hvem eier hva?»

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Direkte, NRK 1 i kveld: Japan

‘Debatten’ på NRK 1 frontes heller dårlig på NRK sine nettsider, og med mindre du ser promo på tv, er det vrient oppdage temaet for sendingen i forveien. Så, via BI:
Screen shot 2011 03 17 at 13 01 34
(Fra bi.no)

Antar at de økonomiske, humanitære og kjernefysiske sidene av denne katastrofen belyses med norsk ekspertise, mens forhåndsinnspilte reportasjer fra NRKs journalister i Japan åpner programmet i kveld (sent på natten japansk tid.)

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Å donere/ikke donere til Japan, fortsettelse.

Som vi var inne på, å gi penger til Japan er ikke den mest effektive måten å hjelpe på. Dette via Felix Salmon:

Donating to Japan, cont.:

Stephanie Strom has a fantastic article in the NYT today, which actually reports out the whole issue of why it’s silly to donate money to Japan. Go read the whole thing, but here’s some choice bits:

The Japanese Red Cross, for example, has said repeatedly since the day after the earthquake that it does not want or need outside assistance. But that has not stopped the American Red Cross from raising $34 million through Tuesday afternoon in the name of Japan’s disaster victims…

The Japanese government so far has accepted help from only 15 of the 102 countries that have volunteered aid, and from small teams with special expertise from a handful of nonprofit groups…

Many of the groups raising money in Japan’s name are still uncertain to whom or to where the money will go…

Holden Karnofsky, a founder of GiveWell, a Web site that researches charities, said he was struck by how quickly many nonprofit groups had moved to create ads using keywords like ‘Japan,’ ‘earthquake,’ ‘disaster,’ and ‘help’ to improve the chances of their ads showing up on Google when the words were used in search queries.

‘Charities are aggressively soliciting donations around this disaster, and I don’t believe these donations necessarily are going to be used for relief or recovery in Japan because they aren’t needed for that,’ Mr. Karnofsky said. ‘The Japanese government has made it clear it has the resources it needs for this disaster.’

The NYT has, smartly, disabled commenting on the article — people get really emotional about this subject, and can be astonishingly bad at understanding what you’re saying. (No, Bill O’Reilly, I did not tell the government not to send aid; I did not say that there wasn’t much relief in Haiti, and I certainly didn’t say that we shouldn’t send money because ‘we don’t have any money, we’re bankrupt.’) But Strom’s message is important — the Japanese Red Cross is very explicitly and repeatedly saying it neither wants nor needs the money that the American Red Cross is raising for it. So if you’re going to donate money to a desperate cause, there are much better ways of doing so.

(Via Felix Salmon.)

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Geiger teller i Tokyo. Ingen fare, ennå.

Screen shot 2011 03 15 at 17 17 26
Denne telleren kan du følge her. Dette er dramatisk i så mange dimensjoner.

Update: Webcam nummer to her.

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Ikke gi penger til Japan, de har nok av det.

Felix har et godt poeng, særlig det faktum at den japanske sentralbanken trykket opp ca. ett norskt statsbudsjett i nye penger.

Don’t donate money to Japan:

Individuals are doing it, banks are doing it — faced with the horrific news and pictures from Japan, everybody wants to do something, and the obvious thing to do is to donate money to some relief fund or other.

Please don’t.

We went through this after the Haiti earthquake, and all of the arguments which applied there apply to Japan as well. Earmarking funds is a really good way of hobbling relief organizations and ensuring that they have to leave large piles of money unspent in one place while facing urgent needs in other places. And as Matthew Bishop and Michael Green said last year, we are all better at responding to human suffering caused by dramatic, telegenic emergencies than to the much greater loss of life from ongoing hunger, disease and conflict. That often results in a mess of uncoordinated NGOs parachuting in to emergency areas with lots of good intentions, where a strategic official sector response would be much more effective. Meanwhile, the smaller and less visible emergencies where NGOs can do the most good are left unfunded.

In the specific case of Japan, there’s all the more reason not to donate money. Japan is a wealthy country which is responding to the disaster, among other things, by printing hundreds of billions of dollars’ worth of new money. Money is not the bottleneck here: if money is needed, Japan can raise it. On top of that, it’s still extremely unclear how or where organizations like globalgiving intend on spending the money that they’re currently raising for Japan — so far we’re just told that the money ‘will help survivors and victims get necessary services,’ which is basically code for ‘we have no idea what we’re going to do with the money, but we’ll probably think of something.’

Globalgiving, it’s worth pointing out, was created to support ‘projects in the developing world,’ where lack of money is much more of a problem than it is in Japan. I’m not at all convinced that the globalgiving model can or should be applied directly to Japan, without much if any thought about whether it’s the best way to address the issues there.

That said, it’s entirely possible that organizations like the Red Cross or Save the Children will find themselves with important and useful roles to play in Japan. It’s also certain that they have important and useful roles to play elsewhere. So do give money to them — and give generously! And give money to other NGOs, too, like Doctors Without Borders (MSF), which don’t jump on natural disasters and use them as opportunistic marketing devices. Just make sure it’s unrestricted. The official MSF position is exactly right:

The ability of MSF teams to provide rapid and targeted medical care to those most in need in more than 60 countries around the world – whether in the media spotlight or not – depends on the generous general contributions of our donors worldwide. For this reason, MSF does not issue appeals for support for specific emergencies and this is why we do not include an area to specify a donation purpose on our on-line donation form. MSF would not have been able to act so swiftly in response to the emergency in Haiti, as an example, if not for the ongoing general support from our donors. So we always ask our supporters to consider making an unrestricted contribution.

I’ve just donated $400 in unrestricted funds to MSF. Some of it might go to Japan; all of it will go to areas where it’s sorely needed. I’d urge you to do the same, rather than try to target money at whichever disaster might be in the news today.

Update: Some bright spark has set up a ‘Socks for Japan’ drive. I’m not making this up. I trust that none of my readers are silly enough to send socks to Japan, but this is a great indication of how wasteful a lot of well-intentioned giving can be.

(Via Felix Salmon.)

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Jordskjelvforsikring i Japan.

Jeg må finne ut mer om jordskjelvforsikring i Japan:

The economics of Japanese earthquake insurance: «

Here is one interesting bit:

…very few people in that region of Japan held earthquake insurance, and also because of strict loss limits imposed by the Japanese government. For instance, residential buildings and furniture can be covered, but very expensive jewellery and artwork cannot, and there are rules that ban people from taking out insurance once an earthquake warning has been issued.

Mr. McGillivray said the Japanese government protected domestic insurers by limiting foreign participation in the system and, to keep the risks manageable, limited the payouts.

Are the capital requirements on Japanese insurance companies well-designed?  Probably we will find out.  Can anyone recommend readings on this and related questions?

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Mer om økonomien rundt slike tragiske naturkatastrofer kommer.

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