Japan crisis - the worlds economic outlook?

worldtraveller

Japan's earthquake and nuclear crisis have put pressure on the already fragile global economy, squeezed supplies of goods from computer chips to auto parts and raised fears of higher interest rates.

The disaster frightened financial markets from Tokyo to Wall Street on Tuesday. Japan's Nikkei average lost 10 percent, and the Dow Jones industrials fell so quickly after the opening bell that the stock exchange invoked a special rule to smooth volatility.

Yet the damage to the U.S. and world economies is expected to be relatively moderate and short-lived. Oil prices are falling, helping drivers around the world. And the reconstruction expected along Japan's northeastern coast could even provide a jolt of economic growth.

A weaker Japanese economy could help ease global commodity prices because Japan is a major importer of fuel, agricultural products and other raw materials, notes Mark Zandi, chief economist at Moody's Analytics.

Even "assuming a drastic scenario," Bank of America economist Ethan Harris estimates, the disaster would shave just 0.1 percentage point off global economist growth — to 4.2 percent this year......(continues)

AP

MrEnglish

worldtraveller wrote: »

Japan's earthquake and nuclear crisis have put pressure on the already fragile global economy, squeezed supplies of goods from computer chips to auto parts and raised fears of higher interest rates.

The disaster frightened financial markets from Tokyo to Wall Street on Tuesday. Japan's Nikkei average lost 10 percent, and the Dow Jones industrials fell so quickly after the opening bell that the stock exchange invoked a special rule to smooth volatility.

Yet the damage to the U.S. and world economies is expected to be relatively moderate and short-lived. Oil prices are falling, helping drivers around the world. And the reconstruction expected along Japan's northeastern coast could even provide a jolt of economic growth.

A weaker Japanese economy could help ease global commodity prices because Japan is a major importer of fuel, agricultural products and other raw materials, notes Mark Zandi, chief economist at Moody's Analytics.

Even "assuming a drastic scenario," Bank of America economist Ethan Harris estimates, the disaster would shave just 0.1 percentage point off global economist growth — to 4.2 percent this year......(continues)

AP

The problem is Japan was in a deflation and if you add huge amounts of currency as Japan is doing in a deflation it will not be a easy slide into slight inflation, it could turn into hyperinflation.

Generali

Element47 wrote: »

Gen do you remeber the last round of Japanese QE several months ago was it something like Y100 trillion?

I thought they most put this into US bonds and treasuries?

What will be the fallout if they have to start selling these to pay for the nuke fallout?

The point of QE is to expand the domestic money supply. With QE you buy assets (usually Government bonds) from local banks. The idea is that the banks have more cash sitting unproductively on their books that they are motivated to lend. That increases the supply of money and hopefully pushes up spending which means more stuff gets made, unemployment falls and the economy goes shooting along. It would be weird to print money to buy foreign assets except to keep the value of your currency down, something that the Japanese central bank hasn't been particularly good at as the Yen hit a post-war high vs the US Dollar yesterday!

The accumulation of US assets is because the US buys more goods and services from Japan than it sells to Japan. The only way to make up the shortfall is to sell assets to Japan.

Jonbvn

ninky wrote: »

it's not an overreaction it's an rational reaction. the engineering and science behind the plants in japan is pretty much the best it gets. and as it happens the best it gets has not been good enough.

This is complete nonsense. The reactors in Japan are quite old and and obsolete design. Modern reactors are designed in a much more systemic manner.

However, don't let the facts get in the way of your usual rambling leftwing nonsense.

michaels

Julie, you are very much the voice of reason when it comes to understanding statistics and specifically risk statistics.

However the recent financial meltdown reveals the flaws in statistical models based on probability in complex systems. The Japanese nuclear problems are actually analogous to the financial collapse 'black swan' event - accurately assessing probabilities of unknown unknowns is by definition impossible and in this case the use of probabilities and 99.999 percentile 'confidence intervals' can actually provide false reassurance. With hindsight a 'fail safe' that relied on cooling pumps continuing to run was not a fail safe but who could have predicted (in advance - post event review no doubt the risks wioll be obvious) that so many levels of redundancy would all fail?

To paraphrase Terry Pratchett, if you only have a 1 in 500,000 chance of success it is best to add the flip of a coin in to the risk factors because it is always the 'its a one in a million but it might just work' shots that come off!

julieq wrote: »

The car is warming the planet and causing massive pollution. And being killed by a car has the same impact as being killed by radiation, the outcome is the same. So your logic is twisted.

That's not surprising, most people think like that. The more dramatic or horrific an outcome, the more it's feared and the higher its rated as a risk regardless of how likely it is. It's an emotional entanglement.

But emotion isn't a good guide to risk. End of. And it's a horrendously poor way to run a society. If you follow your ideas, the end point is that people don't have children just because you're irrationally scared of nuclear power generation way beyond the level of risk. Which is utterly crazy.

ninky_2

a blog from a tepco worker who was trying to restore the situation until monday.

http://www.straitstimes.com/BreakingNews/Asia/Story/STIStory_646210.html

'As a worker at Tepco and a member of the Fukushima No. 2 reactor team, I was dealing with the crisis at the scene until yesterday (Monday).'
'In the midst of the tsunami alarm (last Friday), at 3am in the night when we couldn't even see where we going, we carried on working to restore the reactors from where we were, right by the sea, with the realisation that this could be certain death,' she said.
'The machine that cools the reactor is just by the ocean, and it was wrecked by the tsunami. Everyone worked desperately to try and restore it. Fighting fatigue and empty stomachs, we dragged ourselves back to work.
'There are many who haven't gotten in touch with their family members, but are facing the present situation and working hard.'
Battling On
'Please remember that. I want this message to reach even just one more person. Everyone at the power plant is battling on, without running away.
'To all the residents (around the plant) who have been alarmed and worried, I am truly, deeply sorry.
'I am writing my name down, knowing I will be abused and hurt because of this. There are people working to protect all of you, even in exchange for their own lives.
'Watching my co-workers putting their lives on the line without a second thought in this situation, I'm proud to be a member of Tepco, and a member of the team behind Fukushima No. 2 reactor.
'I hope to return to the plant and work on the restoration of the reactor.'

michaels

Thanks for that Ninky.

I just read this:
http://www.bbc.co.uk/news/world-asia-pacific-12767755

and felt pretty bad about sitting here worrying about worldwide financial impacts and the radiation risk to the UK (which is never going to be more than slight) compared to what those directly affected must be feeling.

ninky_2

michaels wrote: »

Thanks for that Ninky.

I just read this:
http://www.bbc.co.uk/news/world-asia-pacific-12767755

and felt pretty bad about sitting here worrying about worldwide financial impacts and the radiation risk to the UK (which is never going to be more than slight) compared to what those directly affected must be feeling.

yes i saw that on the news last night. i had a fit of tears that have been building for a few days. i'm not a tin foil hatter or over sensitive but what is unfolding in japan is just so unimaginable. almost worse because it can't be blamed on poverty and donating seems so futile...money can't buy these people help i fear.

vivatifosi

ninky wrote: »

'I am writing my name down, knowing I will be abused and hurt because of this. There are people working to protect all of you, even in exchange for their own lives.
'Watching my co-workers putting their lives on the line without a second thought in this situation, I'm proud to be a member of Tepco, and a member of the team behind Fukushima No. 2 reactor.
'I hope to return to the plant and work on the restoration of the reactor.'

Thanks for the link ninky. Really interesting.

I hope that they aren't abused and hurt because of this. These people are heroes and deserve to be recognised by the world as such. If the Chilean miners were lauded worldwide as heroes, then these people need to be even more so. The Chilean miners handled a situation beyond their control and got out. These people are choosing to stay and that's exceptionally brave.

ninky_2

what they are doing might buy a little time. i think it look as though the worst is going to happen now it's just a case of when. everyone with any power needs to put their heads together and use that time to think through the consequences of the worst and take action to minimise impact. U.S. are already putting extra radiation sensors in pacific and along the west. the food chain needs to be looked at along with trade links and knock on effects of tokyo possibly being out of bounds.

let's not let the lives of these brave souls go to waste. let's use the time they are giving us as much as we can.