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rffrydr
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 Posted: Fri Mar 03, 2006 12:25 am Post subject: JAPAN |
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Core rate up .5%; 3 in a row:
"Mitsubishi UFJ Securities senior strategist Naomi Hasegawa said remarks this morning by Prime Minister Junichi Koizumi fueled conjecture that the central bank will soon end its present policy.
'[Changes in] consumer prices are coming in above zero and we are seeing signs of getting out of deflation,' Koizumi told a parliamentary committee.
His comments were his most positive yet on recent indications that the economy is winning its battle with falling consumer prices. Previously, Koizumi had insisted that it was too soon to say that the economy was coming out of deflation."
Bonds and stocks were short going in. End-of-day showed resiliency, (complaceny?)
Hey Henry, Devil's advocate: with Japanese debt at a Godzilla-sized 160% GDP on the worlds fastest aging population (and most afraid of foreign workers) do they have any choice BUT to reflate their way out? And politicians want a decade for "reforms."
An end to quantiative easing may be announced at the end of Japanese Fiscal Year--but this could take a long, long time to play out. Markets 1st "verdict."
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HenryTo
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HenryTo
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rffrydr
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rffrydr
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rffrydr
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| Posted: Tue Mar 15, 2011 7:04 am Post subject: |
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Consumption overview:
| Quote: | As of 2008, Japan has fifty-five reactors operating around the country with a total output of 49,467 megawatts.
Nuclear power accounts for approximately one-third of the country's total electric power output. So far, 11 of the
reactors at four plants have been shut and account for a total of around 9,700 megawatts. Refinery shutdowns in the
country account for about 20 percent of Japan’s 4.6 mb/d refining capacity. Japan processed 3.76 mb/d in Dec ’10,
or 83.8% utilization rate. Japan consumed about 4.4 mb/d in 2010, but 20% of the domestically processed 3.76 mb/d
suggests that about 75,000 b/d in product demand would have to be replaced assuming the economy was running
normally. |
Note that peak consumption doesn't begin for a few months off.
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rffrydr
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| Posted: Tue Mar 15, 2011 6:41 am Post subject: |
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The expats have evacuated, all Blackstone personnel for instance, but many more are staying put, trading in the dark. We have surpassed Three-Mile Island but that one just seems more overblown the more time goes on and Chernobyl is still, if you believe the experts, not in the cards.
It was inevitable that multiple "record levels" of radiation would drift. And inevitable that radiation would find its way to Tokyo. As the prevailing winds point to California I took a particular interest in this story last night. But the experts haven't changed their views, the radiation in Tokyo is insignificant and possibilities of an explosion large enough to send core material into the stratosphere are fractions of a single percent. As these reactors are on the ocean you gotta believe though outdated, they will find a way to keep seawater coming in. That trashes the plant but these were at their limits anyway. The rebuilding trade will be the right trade--after the panic. A follow-on quake right now would really shake things up.
I was surprised to see the toyota buying here yesterday. Whole cars come from japan but components like most engines, also come from japan (stealth kieretsu). Northeastern japan is a carparts hub. And the grids operate at different frequencies so no backup from the South! Still an auto bull and still nothing I want to pick up here, now. Yen is the coup-d'gras.
Japan's luck has long drained away. Building something that needs rebuilding will provide them with a focus. And if anyone can conserve their way back to production the japanese can.
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HenryTo
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| Posted: Tue Mar 15, 2011 12:25 am Post subject: |
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Stratfor on the latest nuclear crisis in Japan. After reading this, I am not surprised that the Nikkei is down over 1,000 points.
| Quote: | Japan: Radiation Rising and Heading South
March 15, 2011 | 0551 GMT
The nuclear reactor emergency in Japan has deteriorated significantly. Two more explosions occurred at the Fukushima Daiichi nuclear power plant on March 15. The first occurred at 6:10am local time at reactor No. 2, which had seen nuclear fuel rods exposed for several hours after dropping water levels due to mishaps in the emergency cooling efforts. Within three hours the amount of radiation at the plant rose to 163 times the previously recorded level, according to Japan’s Nuclear and Industrial Safety Agency. Elsewhere radiation levels were said to have reached 400 times the “annual legal limit” at reactor No. 3. Authorities differed on whether the reactor pressure vessel at reactor No. 2 was damaged after the explosion, but said the reactor’s pressure-suppression system may have been damaged possibly allowing a radiation leak. Subsequently, a fire erupted at reactor No. 4 of the Fukushima Daini plant (where cooling systems had also failed) and was subsequently extinguished, but a hydrogen explosion occurred at No. 4 reactor as well, according to Kyodo. Kyodo also reported the government has ordered a no-fly zone 20 kilometers around the reactor, and Prime Minister Naoto Kan has expanded to 30 kilometers the range within which citizens should remain indoors and warned that further leaks are possible.
Reports from Japanese media currently tell of rising radiation levels in the areas south and southwest of the troubled plant due to a change in wind direction toward the southwest. Ibaraki prefecture, immediately south of Fukushima, was reported to have higher than normal levels. Chiba prefecture, to the east of Tokyo and connected to the metropolitan area, saw levels reportedly two to four times above the “normal” level. Utsunomiya, Tochigi prefecture, north of Tokyo, reported radiation at 33 times the normal level measured there. Kanagawa prefecture, south of Tokyo, reported radiation at up to 9 times the normal level. Finally, a higher than normal amount was reported in Tokyo. The government says radiation levels have reached levels hazardous to human health. Wind direction is not easily predictable, constantly shifting, and reports say it could shift west and then back eastward to sea within the next day. Wind direction, temperature, and topography all play a crucial factor in the spread of radioactive materials as well as their diffusion. It is impossible to know how reliable these preliminary readings are but they suggest a dramatic worsening as well as a wider spread than at any time since the emergency began.
The Japanese government has announced a 30 kilometer no-fly zone and is expanding evacuation zones and urging the public within a wider area to remain indoors. The situation at the nuclear facility is uncertain, but clearly deteriorating. Currently, the radiation levels do not appear immediately life-threatening outside the 20km evacuation zone. But if there is a steady northerly wind, the potential for larger-scale evacuations of more populated areas may become a reality. This would present major challenges to the Japanese government. Further, the potential for panic-induced individual evacuations could trigger even greater problems for the government to manage. |
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rffrydr
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| Posted: Mon Mar 14, 2011 10:44 am Post subject: |
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Some preliminary estimates to the damage we can use as a touchstone:
| Quote: | Current estimates are very very preliminary with damage assessment hardly begun, and with many areas still completely inaccessible. As we said on Friday, the fact that the EQ/Tsunami for the main part missed Tokyo, we do not expect losses to get close to the 1 in 250yr PML (potential maximum loss) of c. 10% of TBV’s (1 in 250 is a c. $70bn+ industry loss), however with all earthquakes and particularly in this case with the complications of the Tsunami, we expect loss estimates will more likely creep up than down. As a reminder nuclear coverage is provided for ultimately by a government backstop and will have no impact on insured losses.
In terms of impact for insurers. We expect this to be an earnings event, not a capital event, given that we expect losses to be lower than companies Jap quake PML’s and therefore lower than 10% of TBV. That said this will be enough to test 2011 earnings considerably with Munich, Scor and Swiss already having utilized 100% of cat budgets with NZ/Australian losses (Hannover 50% utilised). In the main, very little personal lines insurance is transferred to the international insurance/reinsurance markets (only 14% of residents buy EQ cover anyway) , but on the commercial side the bulk of the losses will be transferred to the international markets and is where the PML data/exposure comes from. As such the losses will flow to Euro reinsurers, Bermuda and Lloyds. We do not expect any meaningful impact for the Euro conglomerates (AXA, Aviva, ZFS, Allianz therefore). |
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HenryTo
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| Posted: Sun Mar 13, 2011 11:56 pm Post subject: |
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80 Seconds of Warning for Tokyo:
http://www.technologyreview.com/computing/35090/?nlid=4233
| Quote: | | While the systems can only furnish warnings from a few seconds to a minute or two before serious shaking starts, this can be enough time for people to take cover, stop performing surgery in a hospital, exit an elevator, or pull over to the side of the road. |
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rffrydr
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| Posted: Fri Mar 11, 2011 7:36 am Post subject: |
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Alphaville note on insurers, renewal season just ahead implies "clawback":
| Quote: |
Not a worst case, but of considerable severity
Reports to-date suggest that this is some way off a worst case event in the manner of the Great Kanto Earthquake of 1923, but it is still of considerable severity. Our first reference in terms of (re) insured exposure is the realistic disaster scenarios that the majority of the Lloyd s insurers and reinsurers we cover provide, which are based on upwards of $50bn of insured losses. We look at this after tax against 2010 tangible shareholders equity.
NH
Lloyd s insurers exposing about 10% of tangible NAV
With the caveat that the bases are not consistent (see table inside), of our coverage universe, Catlin looks to have the highest exposure at 16% of NAV, along with Hardy at 16%. Lancashire has 15%, Novae 11% and Hiscox 9%. Unhelpfully, neither Amlin nor Beazley give any disclosure on Japanese earthquake exposure there is no reason to think their exposures would not be similar to their peers at c.10% of NAV.
Reinsurers exposures slightly smaller
Swiss Re looks to have the highest exposure among reinsurers at 7% of tangible NAV, although Munich Re does not disclose a number (conference today should provide it, however). Scor has 4% exposure and Hannover Re 3%, although this is only on a 1 in 100 year basis. We think Hannover might have greater ability to offset incremental losses by reserve releases on prior years, particularly in the US, after yesterday s results presentation.
NH
While it is too early to update our forecasts, this event clearly suggests material downside across the board. At this stage, we would assume dividends are safe the Lloyd s insurers would be more at risk here than the reinsurers, particularly Lancashire, where we forecast a special of $1.10, based on a normal loss year. On the plus side, this event comes ahead of the Asian reinsurance renewals, so there may be payback for this loss. While consensus is a $50bn reinsured event is needed to turn the global cycle, before this event, since Chile last year, international reinsured losses stood around $20bn, against global catastrophe premiums of c.$15bn annually a $20bn plus event in Japan would certainly prove a powerful catalyst for higher catastrophe pricing. We are more sceptical as to the impact on sluggish primary markets not impacted by these large losses, particularly the US and Western Europe. |
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rffrydr
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HenryTo
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rffrydr
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| Posted: Tue Feb 22, 2011 9:20 am Post subject: |
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Japanese stocks: peculiarly attractive
Published: February 22 2011 09:48 | Last updated: February 22 2011 09:48
| Quote: | Something odd is happening in Japan. In early November, investors started pouring money into the nation’s equities, as they often do in the run-up to Christmas. What is unusual is that the cash is still coming. Fifteen consecutive weeks of net inflows is the best run for four years. The broad Topix index is up almost a fifth since the first week of November; a top decile performance among the major indices over that period.
Odder still is that the inflows are occurring without the usual catalysts of rising US bond yields or a resurgence of global industrial production. Indeed, investors are increasing commitments to Japan amid mostly bleak news: political paralysis, sovereign credit rating downgrades (even, perhaps, from domestic institutions such as R&I), and still-stagnant lending. |
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rffrydr
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HenryTo
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| Posted: Fri Jan 28, 2011 7:03 am Post subject: |
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IMF joins the bear party re: Japanese government bonds. And as always, Ron Paul is highly quotable:
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U.S., Japan warned by IMF, rating agencies on debt
(Reuters) - The United States and Japan received sharp warnings from the IMF and ratings agencies on Thursday that they must tackle their huge budget deficits to avoid investors dumping their bonds, which would create a sovereign debt crisis and push up their borrowing costs.
Rating agency Standard & Poor's on Thursday cut Japan's long-term debt rating for the first time since 2002, and a day after a U.S. agency raised its 2011 budget deficit forecast by 40 percent.
In the United States, Moody's Investors Service warned said while the risk to the United States' coveted top triple-A rating was small, it was rising.
The International Monetary Fund had harsh words for both the United States and Japan, saying they urgently need to act to cut their deficits.
As a political battle heated up in Washington over the budget, the U.S. Treasury took steps to prevent the government from hitting a legal limit on its debt. Republicans are demanding spending cuts as the price of their support for raising the $14.294 trillion debt ceiling.
President Barack Obama this week announced a five-year freeze in annual domestic spending, which the White House estimates will save more than $400 billion over the next decade, but an International Monetary Fund official said on Thursday that more is needed.
Carlo Cottarelli, director of the IMF's Fiscal Affairs Department, said Washington must be more specific in detailing plans that go further.
One Republican warned that the United States faced the risk of a currency crisis if it did not get its debt under control. "We're getting closer to that all the time," said Texas Representative Ron Paul, who has long advocated a return to a requirement that the dollar be backed by gold.
In Europe, market pressures have forced many governments to adopt austerity budgets to bring down soaring borrowing costs, and the European Union is now locked in debate over whether a
440 billion euro bailout fund for its members is too small. |
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