News Stories

[Xion Valkyrie]

They should just punish the top brass. The problem when companies like these fail is that the top brass will just grab whatever they can and just dump everything on the grunts.

[Noctis Lucis]

This just in.

Japan prime minister Naoto Kan warns of Greek-style public debt problems

Japan's new prime minister, Naoto Kan, today warned that the country risked being sucked into a Greek-style debt crisis unless it quickly reined in its massive public debt.


Kan, who took over last week after the sudden resignation of Yukio Hatoyama, told MPs that Japan risked defaulting if it continued to issue bonds at the current pace.


"Our country's outstanding public debt is huge," he said in his first policy speech to parliament. "Our public finances have become the worst of any developed country.


"We cannot sustain public finance that overly relies on issuing bonds. As we can see from the eurozone confusion that started in Greece, there is a risk of default if growing public debt is neglected and trust lost in the bond market."


Japan's public debt stood at 218% of gross domestic product last year, according to the International Monetary Fund – the highest in the industrialised world.


Kan said the debt problem could not be dealt with overnight. "That is why we need to have a drastic reform from now in order to obtain fiscal health."
His prospects for honouring a commitment to devise a tighter fiscal plan by the end of the month improved today after Shizuka Kamei resigned as financial services minister over a disagreement with cabinet colleagues on post office privatization.


Kamei, who leads a junior coalition partner, had advocated big spending to drag the world's second-biggest economy into sustained recovery and fend off long-term deflation.


But other obstacles, including a looming election, remain to the sweeping fiscal reforms envisaged by Kan, who in his last job as finance minister criticised the Bank of Japan for doing too little to encourage lending, even after it lowered interest rates to near zero.


Kan may be able to gain a mandate for reform if his Democratic party performs well at upper house elections next month, giving them an outright majority in both houses. Support for the Democrats has leaped since Kan's election, from below 20% before he took office to almost 70% this week.


Analysts accused Kan of overplaying Japan's susceptibility to a Greek-style meltdown. "Greece had a huge public debt and huge overseas loans," said Hiromichi Shirakawa, chief economist at Credit Suisse Japan. "Japan has a trade surplus, and it's a major creditor nation. I don't think Japan's fiscal condition is facing a similar crisis."


The government's plan to tackle mid-term debt is expected to include a ¥44.3tn cap on government bond issuance through to the end of March 2012. Fiscal reformers in the government appear to have succeeded in including a reference to tax reform in the ruling party's manifesto for the upper house elections, although it is likely to stop short of suggesting a rise in the consumption tax, currently 5%, to pay for rising health and welfare costs.


Kan has been one of the few politicians to talk publicly about the need to raise the tax, an unpopular move but one that many voters now accept is inevitable.


Economists have warned, however, that the government will have to abandon some of its spending plans if it is to stand a chance of reining in debt.

Every Premier since Shinzo Abe has spent more and more and more. The Bank of Japan also made it worse my increasing interest rates from .25 to .75 not too long ago (before dropping it to .125), and now... I knew Japan needed Thatcherite, not Keynes economics.

[MitsubishiZero]

Originally Posted by Roger Rambo

The real question is how BP will fare when it actually has to start paying out the damages. This will depend on how bad things really are.

One thing i am thinking right now is: how much is BP the company itself is going to pay for the damages. I mean, in large operations anywhere you always buy insurance, the more risky the more you buy. The question now is if BP bought a lot of insurance from American insurance companies (e.g. AIG), then the people end up paying the bill may not be BP at all........

[Roger Rambo]

Originally Posted by Noctis Lucis

This just in.

Japan prime minister Naoto Kan warns of Greek-style public debt problems


Every Premier since Shinzo Abe has spent more and more and more. The Bank of Japan also made it worse my increasing interest rates from .25 to .75 not too long ago (before dropping it to .125), and now... I knew Japan needed Thatcherite, not Keynes economics.

This is what happens when Governments start running things based on massive debt that they have no plan to pay off.

[SaintessHeart]

Originally Posted by Roger Rambo

The real question is how BP will fare when it actually has to start paying out the damages. This will depend on how bad things really are.

Don't worry about that. After the explosion the BP 's stock dropped and greedy people start buying by the pound, as usual.

Remember the stock market is made of 90% greedy and fearful people.

[TinyRedLeaf]

Originally Posted by SaintessHeart

Don't worry about that. After the explosion the BP 's stock dropped and greedy people start buying by the pound, as usual.

Alas, it's not so simple and Roger Rambo did make a very good point. There is still an outside chance that BP might collapse as a result of legal damages from the oil spill.

Imagining the worst in BP's future

New York (June 7): It seems unthinkable, even now, that the disastrous oil spill in the Gulf of Mexico could bring down the mighty BP. But investment bankers get paid to think the unthinkable — and that is just what they are doing.

BP's costs for the cleanup could run as high as US$23 billion, according to Credit Suisse. On top of that, BP could face an additional US$14 billion in claims from gulf fisherman and the tourism industry. So while conservative estimates put the bill at US$15 billion, something approaching US$40 billion is not out of the question. After all, little about this spill has turned out as expected.

The company has about US$12 billion in cash and short-term investments. Also, it turned a profit of nearly US$17 billion last year. "The strength of cash-flow generation in recent quarters has provided us with a balance sheet that allows us to fully take on the responsibility for the Gulf of Mexico response," Mr Hayward told employees last Friday (June 4).

But all those numbers don’t account for the greatest possible threat: a jury verdict against BP. Such a verdict might push the cost of the spill into the hundreds of billions. If that happened, even BP might buckle.

This outcome might seem far-fetched right now. But on Wall Street bankers have already coined a term for it: "the Texaco scenario".

In 1987, Texaco was forced to file for Chapter 11 because it could not afford to pay a jury award worth US$1 billion to Pennzoil. That award had been knocked down by a judge from a whopping US$10.53 billion. Imagine the BP case playing out in a Louisiana courtroom, against the backdrop of an oil-choked local economy, high unemployment and an angry public. How high can you count?

Under the Oil Pollution Act of 1990, BP’s liability for economic devastation — above the cost of the cleanup — is capped at US$75 million, a number Mr Hayward has already said he plans to blow through. But if BP is found to have violated safety regulations, which seems likely, that cap becomes irrelevant.

THE NEW YORK TIMES

[SeijiSensei]

Originally Posted by Noctis Lucis

Japan prime minister Naoto Kan warns of Greek-style public debt problems.

Comparisons to Greece seem inappropriate to me because Japan has its own currency. One of the reasons the weaker economies in Europe are having problems is that they now use the Euro rather than their original national currencies. That forces the weaker economies to adopt policies better suited to countries like Germany than their own. In the past, countries could cope with indebtedness by devaluation (aka "printing money"). This isn't a option for countries in the Euro zone.

Most of Japan's debt is actually held by the Japanese, not by foreign investors, which further limits its risk.

I'm not arguing that Japan can ignore its indebtedness forever, but they are certainly in a stronger position than Greece.

[LeoXiao]

Chinese Farmer fires rockets at hired thugs trying to take his land and bulldoze his property.

Badass.

[Joojoobees]

Pentagon Hunting Wikileaks founder
http://bit.ly/diJuRk
Needless to say this is more fallout from the video leaked earlier. Of particular interest, besides the fact that the Pentagon thinks they can arrest (or worse) members of the press, is descriptions of violation of human rights (freedom of speech) in Iraq by US forces, as they assisted Maliki government (called FPs, Federal Police) in preventing academics from discussing corruption in Maliki government.

Originally Posted by Whistleblower, Bradley Manning

i was instructed to investigate the matter, find out who the “bad guys” were, and how significant this was for the FPs… it turned out, they had printed a scholarly critique against PM Maliki… i had an interpreter read it for me… and when i found out that it was a benign political critique titled “Where did the money go?” and following the corruption trail within the PM’s cabinet… i immediately took that information and ran to the officer to explain what was going on… he didn’t want to hear any of it… he told me to shut up and explain how we could assist the FPs in finding MORE detainees…

When Ugo Chavez shuts down those who speak against him, he is denounced as a tyrant. When Nouri al Maliki rounds up those critical of his regime, US forces are supposed to assist him? This is what bringing "democracy" to Iraq means?

[ZephyrLeanne]

Originally Posted by SeijiSensei

Comparisons to Greece seem inappropriate to me because Japan has its own currency. One of the reasons the weaker economies in Europe are having problems is that they now use the Euro rather than their original national currencies. That forces the weaker economies to adopt policies better suited to countries like Germany than their own. In the past, countries could cope with indebtedness by devaluation (aka "printing money"). This isn't a option for countries in the Euro zone.

Most of Japan's debt is actually held by the Japanese, not by foreign investors, which further limits its risk.

I'm not arguing that Japan can ignore its indebtedness forever, but they are certainly in a stronger position than Greece.

You know, there's a reason why Japan won't fall into there - it's already in one. I mean, the Japanese economy hasn't grown since 1990...

[Xion Valkyrie]

Originally Posted by ZephyrLeanne

You know, there's a reason why Japan won't fall into there - it's already in one. I mean, the Japanese economy hasn't grown since 1990...

Not to mention declining population, increase in hikkis, and death by mercury poisoning. Sucks to be a Japanese in these times

[ZephyrLeanne]

Originally Posted by Xion Valkyrie

Not to mention declining population, increase in hikkis, and death by mercury poisoning. Sucks to be a Japanese in these times

eeeeexactly. That's why, we always ask ourselves - what's the big deal about a year-long recession? We have a multi-decade one!

[SaintessHeart]

Originally Posted by LeoXiao

Chinese Farmer fires rockets at hired thugs trying to take his land and bulldoze his property.

Badass.

WTF LOL. I would like to see this being published in my local papers!

Thumbs up to this old farmer who dared to stand up to those property devs!

P.S It is not an MLRS. It is a Nebelwerfer.

Originally Posted by Xion Valkyrie

Not to mention declining population, increase in hikkis, and death by mercury poisoning. Sucks to be a Japanese in these times

If you ask me, Singapore is going to be the next Japan if we don't shoot our Minister of Education. Both governments aren't helping their citizens to learn something called financial planning for the future.

Since the value of "working hard" is defined by academics in both societies, what the youths would lose out in is generic skills and general knowledge, i.e, using Google (no I am not joking, how many times have you guys here heard of people you know telling you to help them find a piece of information easily available on Google, other than job opportunities?), most of which are valuable to personal independence.

On the local context, our polytechnic and highschool students are losing out to ITE (Institute of Technical Education) students, who are considered to be the "recycled and less intelligent of the society who cannot do well in school" (utter bs if you ask me), in this way because they do not know how to manage their money once they lose their day jobs.

[MitsubishiZero]

Originally Posted by LeoXiao

Chinese Farmer fires rockets at hired thugs trying to take his land and bulldoze his property.

Badass.

ha. I saw that one. He converted some cart to a mobile rocket launcher and set up towers to "defend against the bulldozers".......

He said that he was just fighting for his rights, for what the government promised to pay him for his land but not for high prices.....I am with him on this incident, but owning private firearms is illegal, so I wish him the best of luck......

Got time to teach me how to make a rocket launcher? I have a few names added to my "special list" recently..........

[TinyRedLeaf]

Originally Posted by SaintessHeart

WTF LOL. I would like to see this being published in my local papers! Thumbs up to this old farmer who dared to stand up to those property devs!

Ahem: Farmer declares war (Tuesday, June 8).

Print edition headline: Farmer fires DIY cannon in land fight (Page A11, The Straits Times, Wednesday, June 9).

[ChainLegacy]

Originally Posted by LeoXiao

Chinese Farmer fires rockets at hired thugs trying to take his land and bulldoze his property.

Badass.

This story just made my day. Thanks for linking it. That guy is incredible.

[SaintessHeart]

Originally Posted by TinyRedLeaf

Ahem: Farmer declares war (Tuesday, June 8).

Print edition headline: Farmer fires DIY cannon in land fight (Page A11, The Straits Times, Wednesday, June 9).

Sorry. Lost track of the local news this week. Too lazy to wake up early enough to buy the papers.

[LeoXiao]

P.S It is not an MLRS. It is a Nebelwerfer.

lol that's actually the first thing I thought of when I saw the picture.

[Roger Rambo]

Originally Posted by TinyRedLeaf

Alas, it's not so simple and Roger Rambo did make a very good point. There is still an outside chance that BP might collapse as a result of legal damages from the oil spill.

It's something to distinctly worry about. My parents have a not so insubstantial amount of stock in BP.

[ClockWorkAngel]

Originally Posted by Roger Rambo

It's something to distinctly worry about. My parents have a not so insubstantial amount of stock in BP.

They haven't already bailed? BP has already lost a substantial percentage of its stock prices. If they're hoping for a rally; it might not happen.