Japan's economy in trouble

Japan's 4Q GDP revision confirms deep recession
Japan's economy shrank a bit less than first estimated in the fourth quarter, but the revised government data Thursday is hardly good news, serving only to underscore the increasingly grim picture for the world's second-largest economy. Export demand has collapsed, corporate profits are swerving into losses, and job losses are accelerating nationwide amid Japan's steepest slump since the end of World War II. Analysts say the current downturn — and the response of Japanese companies to it — have combined into a new kind of recession, that's swifter and deeper than ever before. "The Japanese economy was simply collapsing and nose-diving toward the end of last year," said Kyohei Morita, chief economist at Barclays Capital in Tokyo.

Downturn, Recession, or Collapse?

The economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond. Source = Warren Buffett, Republican billionaire investor

The turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union. Source = George Soros, Democrat billionaire investor

The global economy may be deteriorating even more precipitously than it did during the Great Depression. Source = Paul Volker, former Federal Reserve Chair under Democrat President Carter and under Republican President Reagan, and current economic advisor to President Obama

The late Rudi Dornbsuch of MIT knew a huge amount about financial crisis, and could distill a lifetime of study and involvement in collapses succinctly: “it always takes longer than you think; but when it happens, it always happens faster than you can imagine.” Source

BREAKING NEWS: Factory output is collapsing at the fastest pace everywhere. The figures for the most recent month available are, year-on-year: Taiwan (-43pc), Ukraine (-34pc), Japan (-30pc), Singapore (-29pc), Hungary (-23pc), Sweden (-20pc), Korea (-19pc), Turkey (-18pc), Russia (-16pc), Spain (-15pc), Poland (-15pc), Brazil (-15pc), Italy (-14pc), Germany (-12pc), France (-11pc), US (-10pc) and Britain (-9pc). Norway sails blissfully on (+4pc). What do they drink up there?

This terrifying fall has been concentrated in the last five months. The job slaughter has barely begun. Social mayhem comes with a 12-month lag. By comparison, industrial output in core-Europe fell 2.8pc in 1930, 5.1pc in 1931 and 3.9pc in 1932, according to RBS.

Stephen Lewis, from Monument Securities, says we have been lulled into a false sense of security by the lack of "soup kitchens". The visual cues from Steinbeck's America are missing. "The temptation for investors is to see this as just another recession, over by the end of the year. But this is not a normal cycle. It is a cataclysmic structural breakdown," he said. Source

Food crisis hits developing world farms

Farmers in developing countries are struggling despite recent rises in the price of commodities they produce, the Fairtrade Foundation says in a new report. The report, which interviewed farmers' groups in Uganda, Malawi, Nicaragua, India, Sri Lanka and the Caribbean, reveals that many families are spending up to 80% of their entire household budget on basic food items. The rocketing cost of food, fuel and fertiliser prices have had a devastating effect on their livelihoods. In some cases, families have been forced to cut out meals, take children out of school and reduce the amount of land they plant, the report says. Some farmers have even sold their land because they can no longer afford to farm it or buy fertilisers to keep up production.

Japan's economy in trouble

Trade deficit hits record as Japan's exports fall 45%
By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) -- Japanese exports contracted 45.7% in January, surpassing the previous record decline, set in December, and stoking a record trade deficit, as the deepening global recession crimps overseas demand for Japanese goods. The deficit swelled to 952.6 billion yen ($9.92 billion), up from 320.7 billion yen in December, the Ministry of Finance said Wednesday. The trade gap was the largest in a data stream dating back to 1979.