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Japan Machinery Orders Fall More Than Forecast on Exports
Japan’s machinery orders fell more than expected in September as slowing global demand hurts exports, while the nation’s current account surplus narrowed to its lowest level for the month since at least 1985.
Orders, an indicator of capital spending in three to six months, declined 4.3 percent from the previous month, the Cabinet Office said today in Tokyo. The median of 29 estimates in a Bloomberg News survey was for a 2.1 percent drop. The excess in the broadest measure of Japan’s trade was 503.6 billion yen ($6.3 billion), compared with a median estimate of 761.8 billion yen, a Finance Ministry report showed.
Data due next week will probably show the world’s third- largest economy shrank the most since last year’s earthquake. A political impasse over deficit enabling legislation is impeding the government’s scope to aid growth, placing the onus on the central bank to add stimulus.
“We are in the middle of a technical recession” of two consecutive quarters of contraction,Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo and a former Bank of Japan official, said before the report. “It’s hard for the government to do anything to get us out of recession, so the BOJ may need to do more.”
Gross domestic product probably shrank an annualized 3.4 percent in the three months through September, the first decline in five quarters, according to the median estimate of economists surveyed by Bloomberg News. The Cabinet Office will release the report Nov. 12.
Falling Output
Industrial production in September fell the most since the March 2011 earthquake and exports dropped more than expected. Retail sales the same month rose less than forecast as the expiry of government subsidies for purchases of fuel-efficient cars sapped consumer demand.
“The weak global economy is curbing orders from overseas firms,” Matthew Circosta, an economist at Moody’s Analytics in Sydney, wrote in an e-mailed note before the report. A broader investment slowdown has also dragged on machinery orders, he said.
Fanuc Corp. (6954), the world’s largest maker of controls that run machine tools, reported last month its first-half profit missed its forecast as slower demand for goods in Europe dented production and deterred manufacturers from investing in new equipment.
The current account surplus has fallen from a peak of 3.3 trillion yen in March 2007, with the nation posting trade deficits in 10 of the last 12 months. Only the income surplus, the current account portion that includes earnings from overseas investment, is preventing Japan from falling into deficit, which would require overseas funding to service the world’s largest public debt.
Exports Deteriorating
Stocks fall on post-election worries about fiscal cliff
Investors worried that another recession looms after the U.S. elections left the same gridlocked politicians to deal with the fiscal cliff. The Dow and S&P 500 lose 2.4%; the Nasdaq drops 2.5%.
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Traders work at the New York Stock Exchange the day after election day. U.S. stocks slid as investor focus returned to the budget debate and Europe’s debt crisis after Obama’s reelection. (Peter Foley, Bloomberg / November 8, 2012)
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WASHINGTON — Financial markets plunged as concerns about Europe's economy combined with the morning-after reality that the U.S. elections left the same gridlocked politicians to deal with the fast-approaching fiscal cliff.
The Dow Jones industrial average fell 313 points, or 2.4%, on Wednesday to its lowest level in three months. The broader Standard & Poor's 500 index also ended the day down 2.4%, and the Nasdaq was off 2.5%.
Investors worried that another recession loomed next year unless newly reelected President Obama and still-strong congressional Republicans could stop the large tax hikes and government spending cuts that kick in Jan. 1.
"We've gotten certainty on the presidency and now we move into the uncertainty of where we were before — the fiscal cliff," said Quincy Krosby, market strategist at Prudential Financial. "The market's not going to have much patience to wait to see when the negotiations begin in earnest and how they evolve."
Sectors in Washington's fiscal or regulatory cross-hairs — defense, healthcare, energy and financial — took drubbings. Big banks, which are subject to many new financial rules championed by Obama, got hammered.
Goldman Sachs Group Inc. lost $8.27, or 6.6%, to $117.98. JPMorgan Chase & Co. lost $2.40, or 5.6%, to $40.48. Morgan Stanley plunged $1.56, or 8.6%, to $16.63. And UnitedHealth Group Inc., the health insurance giant, lost $2.13, or 3.8%, to $54.26, as hopes for a repeal of Obama'shealthcare reform law faded with his reelection.
More signs of trouble regarding the European debt crisis also pushed markets lower. European Central Bank President Mario Draghi said new data indicated that the fiscal problems were starting to affect Germany, the Eurozone's strongest economy. Growth forecasts for the region were downgraded.
And riots broke out in Greece ahead of the Greek parliament's narrow approval of a tough new round of spending cuts.
But most of the attention was on Washington. Fitch Ratings, one of the three leading credit rating companies, highlighted the stakes facing politicians in the coming weeks.
The firm declared there would be "no fiscal honeymoon" for Obama, warning that the U.S. probably would face a ratings downgrade if a deal could not be brokered to stave off the fiscal cliff and to increase the nation's debt ceiling again.
Business leaders said that with the bitter presidential and congressional elections over, it was time for Democrats and Republicans to join together and prevent another fiscal crisis.
"The most important mandate coming out of this election is fixing the problems we knew we had to fix," said Jay Timmons, president of the National Assn. of Manufacturers.
The challenge is huge.
9 comments:
So when there are no jobs what do Americans do? We go back to school on borrowed money and buy a new car. I believe the only reason we cut back on CC use is we are maxed out. No red blooded American cares what the interest rate is.
We are consumers and dammit we must have the latest electronic gizmo that we cannot afford. This way we can take pictures and videos of everything we see.
All we really care about is can we still afford the minimum monthly payment and how much more can we borrow. Now we will get out of college in serious debt that we cannot discharge in bankruptcy and still cannot get a job. There will be no jobs for a very, very long time, but hey don't we look cool driving our new car and sporting a degree in Political Science or Ancient Civilizations studies?
Associated Press
MORE BORROWING: Americans took out more student and auto loans in September, boosting consumer borrowing to a record level. But they cut back on credit card borrowing, a sign many remain cautious about taking on high-interest debt.
But as we become more dependent on government, then why should we work? British comedies have made jokes about being 'on the dole' for years.
A family example. My cousin has a PhD in history. Her son is a business major who has NEVER held a job. Not scooping ice cream. Not raking leaves. Nothing. But he has a HUGE trust fund. So he's at U of Tampa and will graduate this year. SHE signs him up for classes. SHE is going to go talk to his advisor about getting him an 'internship' this last semester. SHE is going to go get info because now he wants to go to grad school (because he has a girlfriend up there AND he plays ice hockey up there, and because there are 'no jobs.') She's a big liberal who boasts that: "Dr. XX will go and see this professor or that," and "Dr. XX has decided to send for books for 2 courses the Community College where she teaches have on their books but currently aren't offering."
This is her liberal mentality of speaking support for causes but her FLUSH wallet allows her lunching and shopping as hobbies.
It is all I can do to remain pleasant on the phone and I bite my tongue so much it bleeds at times. She married a draft dodger and went to Canada BUT is annoyed that SHE can't qualify for Medicare yet. Or SS yet.
Yeah, I really bleed over that. And she wants me to come visit? Like I have anything other than blood in common. I don't drink much. She doesn't approve of my faith and disses it as much as she can...YET she calls me when stuff goes wrong in her life.
My viewpoint has changed a LOT over the past few months. I'm willing to help individual people but I'm not into supporting the mass 'pleadings' for help like I used to be. Not when I see what is happening. Maybe that is very unChristian of me, but I guess I'm slowly changing to the 'it is what it is' cynicism displayed by everyone else.
When you get $.93 on $4,000 of savings, just how do you manage to SAVE anything? And why should you, Queen?
The government is going to keep printing. It's worked for Japan for twenty years or so. I think I was wrong. All the gloom and doom is made up to sell books. None of us will answer for a darned thing so party on...
After all, one of the NY emergency managers took people to cut down HIS tree so HE could get electric rather than pay attention to everyone else. Yes, he got fired but FEMA was closed yesterday because of weather---while the citizens the government is so 'concerned' about helping froze their butts off. So those expecting the government to 'care for them' or 'help them' better get a darned good bunch of friends---cause the government isn't going to do XXXX
"When you get $.93 on $4,000 of savings, just how do you manage to SAVE anything?"
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CL, you just have to be smart about how you spend your money. Stock up on things when they go on sale - this will save you around 10% or so on your purchases.
When you need to go out and drive somewhere - say shopping or wherever - plan your outing so that you save gas (& time) by visiting multiple places that day, rather than making more frequent trips.
Then take the money you saved and stash it under the mattress - OR convert it into shiny silver (or gold) discs and stash those somewhere safe.
CL I understand you frustration. I too have no sympathy for those who do not embrace the new normal "frugality" However, we can only change ourselves and no one else. Don't let her get you BP up.
I find the older I get the more conservative I am and the less tolerant I am of the young's stupidity. You know the kind where money grows on trees and any college education entitles them to a 100k job with pensions and health benefits. These people live in a different world than I do. I cannot find any job unless I go back on the phones and listen to complaints for 8 straight hours a day.
This afternoon I had a fencing contracter bid on repairing a damaged fence here at the Mill. He told me that since before the election, business has just fallen off the cliff and they have NO work for next week.
Since this is a small job, I asked my boss whether there was any other fence-repair work here, that they should also bid on. Her reply was, "No, we do not want to spend any money right now."
To me, this is an indicator of the true state of the economy.
Mammoth I don't know what Romney would have brought to the table. The POTUS does not run the economy. No one can spend money who doesn't have it no matter what the political climate. If I thought that Romney could fix this I would have voted. I think we are screwed.
Well, I wouldn't panic just yet - probably too late for that. A calm acceptance is probably more in order.
But I doubt the USA will plunge over the "fiscal cliff" on Jan 1, it will be in about 2-3 years. The scum called politicians will cobble together some last minute "deal" to preserve the status quo, sorry as it is, and everyone will stumble forward into the New Year.
But there is little doubt that America is running out of deficit spending road. And there is really only one way to fix that issue - a combination of massive tax hikes and massive spending cuts, since the problem is so massive. You won't have Japan's 20 years to fail, as they have already shown it is a failure, and the world realizes that deficit hiking is the road to ruin, just ask Greece.
The Second Great Depression rolls on, a little slower unfolding than it should have, due to too much "stimulus" from Central banksters.
The USA will have it's turn in the reality spotlight, when fictional economic belief systems collapse. But Japan and EUrope are ahead of you on the collapse track, and they have to finish before you.
In 5 years, almost every nation will have a balanced Budget, one way or the other, as they are slowly dealing with that concept known as reality now. Except the USA who will be last to cross the line, as you are still firmly stuck in the early denial phase.
Give it time. Obama's re-electin may actually hasten the en, as he will want to have lots of "stimulus", increasing the debt/deficit even faster, and Ben will comply. Until it can't be done any more, and then things will get bad in a hurry.
See Bruce Krasting's Blog and Karl at Market Ticker for recent posts on this, they state their cases well.
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