Monthly Archives: March 2011

Japan Post, enabler of government debt

The Asia Times has an article arguing that one factor giving Japan some financial leeway is its continued ownership of Japan Post Bank. It’s an interesting read that reviews the history and recent politics of the issue:

[T]he Japanese government has a captive funding source: it owns the world’s largest depository bank. As US vice president Dick Cheney said, “Deficits don’t matter.” They don’t matter, at least, when you own the bank that is your principal creditor. Japan has remained impervious to the speculative attacks that have crippled countries such as Greece and Iceland because it has not fallen into the trap of dependency on foreign financing.

Japan Post Bank is now the largest holder of personal savings in the world, making it the world’s largest credit engine. Most money today originates as bank loans, and deposits are the magic pool from which this credit-money is generated. Japan Post is not only the world’s largest depository bank but its largest publicly owned bank. By 2007, it was also the largest employer in Japan, and the holder of one-fifth of the national debt in the form of government bonds.
...
Japan Post Bank started diversifying away from low-interest government bonds into more lucrative investments. In December 2010, sources said it was considering opening its first overseas office in London, “aiming to obtain the latest financial information there to help diversify its asset management schemes.”

But that was before the crippling tsunami and the nuclear disaster it triggered. Whether they will finally force Japan Post’s privatization remains to be seen. Other vulnerable countries have sold off their assets only to wind up in debt peonage to outside creditors.

The Japanese government can afford its enormous debt because the interest it pays is extremely low. For the private economy, public debt IS money. A large public debt owed to the Japanese people means Japanese industries have the money to rebuild. But if Japan Post is sold off to private investors, interest rates are liable to rise, plunging the government into the debt trap it has so far largely escaped.

The Japanese people are intensely patriotic, however, and they are not likely to submit quietly to domination by foreigners. They generally like their government because they feel it is serving their interests. Hopefully the Japanese government will have the foresight and the fortitude to hang onto its colossal publicly owned bank and use it to leverage its people’s savings into the credit needed to rebuild its ravaged infrastructure, avoiding a crippling debt burden to foreign interests.

In a sense, having a reliable buyer of government debt is attractive, but this system is not sustainable, nor can it be “leveraged,” as far as I can tell. Japan Post Bank’s deposits have been falling steadily, both because of the aging population and the unattractive interest rates. The whole reason the bank wants an overseas office is because it is interested in chasing yields in riskier investments, a desperate attempt to provide any sort of meaningful return on deposits. Over the short term, keeping the system in place makes sense, but longer term the country needs to wean itself off excessive debt and retool for a declining population, if that’s even possible.

Update: The writer of this piece works for the Public Banking Institute, a think tank organized to promote the concept of government-owned banks in the US.

Power to the people?

After meeting with French President Nicolas Sarkozy today, PM Naoto Kan commented that Japan needs to debate whether Japan’s current electric utility system should exist in its current form. At present, the government grants monopolies to regional utilities, which are private corporations listed on the stock market.

Admittedly, I had not thought much about this issue until this crisis came along, but now I am trying to learn more. Countries take different approaches to who owns the power utilities. For instance, the US has investor-owned utilities that provide around 38% of generating capacity, with the rest a mix of public and cooperative-owned entities.

I don’t have an opinion one way or the other at this point, but I can see how the different ownership structures can skew incentives. If you are trying to provide returns to shareholders, you might be more inclined to promote more electricity usage, as Tepco has done by offering discounts to people who use “all-electric” homes with electricity-powered stoves and baths, etc. On the other hand, both privately owned and public utilities can cultivate the types of entrenched, bureaucratic management teams that lead to the types of massive cover-ups and bungling incompetence we have seen at Tepco.

(Disclosure: I own a small investment in Tepco. Take nothing I say as investment advice)

Temporary blog hiatus

Last Friday I had a clumsy bicycle accident and smashed my right arm into the curb, breaking it just below the shoulder. It is, of course, pretty painful and very inconvenient – especially since I am flying home to New Jersey on Thursday! (Not “fleeing” anything, just that I graduated from my MA at Kyoto University last week and this has been my plan.) I can obviously still type using just my left hand, but it is still pretty tough so I will probably not be posting for a few weeks while my arm heals.

I’m sorry I have to stop now, just as so many new readers are coming in for our disaster related blogging, but the others will continue to post and I should be back in a month ago to discuss both related and unrelated topics.

The “Fly-jin” hype, or: 「フライジン」に該当するページが見つかりませんでした

In English-language news media, everyone is talking about this new word “Fly-jin”, a play on “Gaijin,” i.e. foreigners who have fled Japan in the wake of the earthquake/tsunami/nuclear holocaust [/sarcasm]. Take this article in the Wall Street Journal that everyone is talking about:

The flight of the foreigners—known as gaijin in Japanese—has polarized some offices in Tokyo. Last week, departures from Japan reached a fever pitch after the U.S. Embassy unveiled a voluntary evacuation notice and sent in planes to ferry Americans to safe havens. In the exodus, a new term was coined for foreigners fleeing Japan: flyjin.

The first part of that excerpt is true—foreigners really have fled, and lots of Japanese companies are really pissed about it. I just heard a story of a person fired from a (rather domestic, small-minded) Japanese company for fleeing the country and missing 8 days of work. (I think the biggest problem in this sitaution wast the backward employer and the failure of communication by the fleeing foreign employee.)

But has anyone heard the word “Furai-jin” in actual Japanese conversation? A search of the Japanese version of news.google brought in zero results for “フライジン” and no relevant searches for “フライ人”. A google search for the later brought up lots of pages regarding people who are in love with fly fishing. A targeted google search brought up one thread on a 2ch Japanese chat threat—which is a translation of the Wall Street Journal article! In fact, I find myself in full agreement with a commenter on that 2ch thread:

>”flyjin”(fly + gaijin)
これ絶対この記事書いた奴が考えたろ…

Translation: “’Flyjin’... I bet the guy who wrote this article came up with that.”

So a challenge to Mariko Sanchanta, author of the above WSJ article: can you show us the word “furai-jin” was used before you put it in your article?

Radiation safety update

Click here for the latest updates to this post.


There is an awful lot of panic and speculation regarding the situation at the Fukushima #1 (Daiichi) Nuclear Power Plant and in particular its possible effects on the Tokyo Metro area. What is really going on?


Short answer – things seem to be pretty safe for now, but there is still a possibility of danger if things don’t go well.

Since I am continually updating this post (first published on March 15 at 6:40PM) I have reassigned the date to bring it back to the top, but edited the formatting slightly to keep its length from blocking out the other recent posts.

I have also been very active on twitter the last week and will continue to post there more often than here, but probably less often than I have been since I have a lot of other stuff to take care of. You can follow me there @mutantfroginc.

To read from the beginning just click below (if on the main page) or scroll down, and to jump to the latest posts click on the link at the top.

Continue reading

Managing stress after the quake

Many people on the ground in the Tokyo area (and their loved ones abroad) are no doubt locked into all the twists and turns of the earthquake’s aftermath. There are a lot of ups and downs. This is a very stressful situation, and that makes it extra important to try and manage stress levels every now and again. The Air Force radio station this morning broadcast some good common-sense tips. The general tips are in bold, with my own advice added on:

  1. Take a break from the news every now and again. Though events are unfolding rapidly, you can’t change what’s going to happen from your computer chair. Take an hour to watch some TV, talk to your spouse, or anything that you enjoy. Or just lay down for a while. The world will still be there when you come back.

  2. Get plenty of sleep. For this one, I would also add, don’t bring your iPod Touch/iPhone/smartphone to bed with you. If I do I find myself tempted to check the news just one more time, and then again, and then yet again and before I know it it’s 1am.

  3. Eat right. Make sure to eat square meals, especially breakfast. I would also add don’t feel bad about eating stuff you like. It’s not inappropriate to laugh and smile.

  4. Avoid excessive alcohol. Not only will too much booze not relieve stress, you’ll be unprepared if something actually does happen. Stay alert!

  5. Exercise. This is one I have not been doing well on, but keeping active is always a good way to let off some steam.

Obviously, the worst victims of the quake are in the northeast, and their stress levels are sky-high (JP). But it’s important not to let the situation get the best of you no matter where you are.

Japan air travel update

I am flying out of Tokyo tonight to spend the holiday weekend in Hawaii and try to decompress from all the nonsense surrounding the disaster situation here.

Narita Airport is operating fairly normally—it has its own generators which will keep it online through the surrounding blackouts—but most European airlines have dramatically altered their flying patterns, adding stops in Seoul, Beijing or Hong Kong. Lufthansa has stopped serving Tokyo entirely. The reason is that foreign flight crews do not want to spend a night in Narita when there is a nuclear meltdown raging just up the road, so they are instead overnighting elsewhere in Asia and operating day trips in and out of Tokyo from there.

From online fora, I have also discovered that American flight crews are agitating. They are not only concerned about radiation, but are also protesting that aftershocks disturb their sleep (posing safety concerns), and that the periodic blackouts and runs on toilet paper are making their layovers unnecessarily rough. The big problem here is that unlike the European airlines, Delta, American and United-Continental really need to keep operating direct flights to Narita, as they route almost all US-to-Asia passengers through Narita (Delta to its own connecting flights, other airlines to local JV partners’ connecting flights) and would be forced to accommodate connecting passengers on non-affiliated airlines at considerable expense if their own flights were diverted to other Asian airports.

Most governments are currently advising against non-essential travel to Japan, and I second this recommendation; there are too many variables that could combine to make Japan travel a living hell. If you really need to come here for whatever reason, plan to fly into Nagoya or Kansai.

Post earthquake initial impressions by Adamu

It is still very early into this tragedy, and a lot could change in the coming days/weeks/months. But I wanted to give some initial impressions. I have been going to the office as usual and basically heading directly home to keep updated and try and calm down my mother via Google Talk. Here are some of my observations so far based on my experiences and the reports I have been reading and watching in English and Japanese. To save time, I have not included links to some stories I did not feel like digging up:

  • Japan rocks – The reaction to the earthquake has been impressive, though sadly even the best response is unequal to adequately deal with the massive destruction in northeast Japan. The buildings were strong enough to stay standing through the quake, the streets were safe enough to walk home when no trains ran, and a full court press came to the rescue the next day. As far as planning and citizen preparedness goes, Japan has the whole world beat, hands down. It seems like in many ways the authorities learned from the failings of the Kobe earthquake. I feel very proud of my adopted home. Note that the emperor agrees with me. In his recent national address, he noted with admiration that foreign observers praised the Japanese people for their calm, helpful reaction to the quake.
    Unfortunately, even the best plans cannot protect against one of the biggest earthquakes/tsunamis ever known. The damage is immense, and it will take a long time to recover. But I am confident that Japan has what it takes to get through the disaster and emerge as strong as ever.
    As the days unfold, I notice that one advantage Japan seems to have on its side is a very adversarial media. From the outset, I think the Kan administration has done its best given the circumstances, and I don’t really agree with the assessment of some media outlets that it was too slow to set up shop inside Tepco. However, on top of that the mainstream media covering this story have (admirably) shown very little deference to the prime minister and Tepco. I think this has put the fear of God into these officials to disclose as much information as possible and be as cooperative as possible. Also, the US (among other countries) is offering very generous support and has been among the most supportive governments in backing up Japan’s response. It has issued statements saying they are “in agreement” with the Japanese assessment of the nuclear situation. Betraying US confidence at this point would not go down well. With all that pressure, attempting to hide things could easily turn Tepco into the next BP (and then some) and the Kan administration into the villain that Murayama is remembered as being during the 1995 Kobe earthquake.
    Twitter has also been a big positive, in my opinion. It helps average people exchange trusted information (and lies to a much lesser extent), and there is a kind of wisdom-of-crowds quality in which certain proposals are retweeted by enough alpha-users that they grab the attention of the authorities. For instance, I saw some prominent Japanese Twitterers retweet a request to have sign language interpreters at press conferences, and a day later sure enough there they were. On the other end of the spectrum, there have been some chain letters spreading untrue rumors. I received one about “poison rain” due to the Chiba oil tanker fire, and I have heard about others. It is worth noting that the person who sent that one emailed me after she learned it was false.

  • Supply shortages in Tokyo should be resolved soon - At this point, it is hard to tell what is more to blame for the empty shelves – the hoarders or the reduced shipments? All the same, manufacturers are reporting sufficient capacity to supply the area, and any disruptions in deliveries should be relieved by next week’s release of emergency oil reserves. The reserves should alleviate the supply shortages and give time for availability even in Tokyo to get back to normal as early as next week. One big reason for the delay is that the worst affected regions got priority, which is only natural.
    Unfortunately, this is one area where average people and the government were kind of a letdown. For one thing, people seemed to start panic buying very quickly. I took a trip to Tochigi on Sunday and already the gas station lines were long. At the same time, the government only started telling people to stop panic buying today! The media seemed to be doing its job, noting the activity and noting how problematic it was, at least as far as I read.

  • People are overreacting to the nuclear crisis, big time – The risk of radiation is, by all credible accounts, very small for almost everyone in the country. I am as glued to updates as anyone, but I am not panicking. In fact, I think focusing too much on the nuclear crisis runs the risk of de-emphasizing the massive toll the tsunami took on the region. The French chartering flights to evacuate expats and warnings based on nuclear fears are overdoing it, I think. I mean, I would understand some people without a deep connection to the country leaving, or at least moving or sending loved ones to stay somewhere safer. I have my wife and in-laws in the area, so I don’t want to leave unless it is truly necessary. In addition to the nuclear concerns, there are the transit problems and hoarding/logistics problems with daily necessities, not to mention the risk of aftershocks. This is scary for everyone, but people who don’t know the language or don’t have people to rely on have that added layer of difficulty. And if you can’t follow the mainstream Japanese media (and sensible Internet sources like Mutant Frog!), you are liable to read sensationalized reports from the overseas media.
    This last bit is a sore point for me. Thanks to all the scary US media reports, my mother has been absolutely terrified. My relatives and family friends have been calling her nonstop to know if I’m OK. I know the media are in the misery business, but more than that it seems like the reporters are far too detached from the story. They focus so much on broader implications and potential scenarios that it ends up providing no practical information to people who actually want to have an even-handed idea of what’s going on.

  • The aftershocks are really scary – since the big earthquake it almost feels like there are small rumblings going on constantly. I especially feel this way at the office, where the building’s design makes it kind of easy to feel small tremors. The bigger ones fill me with dread. As they happen, I wonder if this one will build up slowly into a big quake like the one on Friday. Even when there are no quakes, for some reason I feel like the ground is shaking when I am walking down long hallways.

  • Many outside observers have failed a very easy test of decency – When reacting to a tragic event, the rules of etiquette are simple. Express sympathy for the victims and note the tragedy of the affair. This is not the time to make dumb jokes, call a natural disaster retribution for something some people from Japan did that you don’t like, or condescendingly generalize about Japanese culture. Too many people have failed miserably in this regard. If you need to react this way, keep it off the Internet at least!

  • I am a terrible investor – Last and most definitely least, what do you think is the only individual stock I own? Some hints: In the two months since I bought in, it has seen much of its generating capacity wiped out forever and been threatened with government-enforced annihilation for mishandling the disaster response. Oh and it has been limit-down for three days straight.

Want to help out a medical team from America?

I was forwarded an email from an American medical group that says they have experience working in the 2005 SE Asian tsunami zone, Haiti after their recent big quake, etc. and are now looking for some locals to help them with things like supplies for themselves, transportation, other logistics. Please contact them if you think you can help.

My boss Steve is a former paramedic from NYC, and he and some other paramedics do periodic missions to disaster zones:

http://www.nycmedics.org/

As I understand it, it’s kind of a DIY-style operation, which allows them to move really fast. After the earthquake in Pakistan, they got into remote areas way ahead of anyone else and did a lot of good work.

So, he’s coordinating a trip to Japan and wanted to know if you have any contacts anywhere near Tokyo that could help them with logistics and such. For example, they might need a place to crash, rides, probably a translator, and I’m not sure what else. I’m sure any info or insight you can provide would help.

-Jesse


We’re not quite ‘DIY’ as we do coordinate and work within the overall establishment of the relief effort, but Jesse’s right about our particular mission description, which is to find the underserved communities within the affected area quickly. From experience, we’ve found that these scattered relief ‘deserts’ persist for as long as month after an event of this scale and so we try to get to them quickly and work there until the larger efforts catch up with them. So we send teams of 4-8 MD’s, RN’s, PA’s, and Medics in pretty quickly and they need to be able move pretty quickly(aka, without proper logistical planning) So local contacts that can be called on to help a team are incredibly valuable. If you have any ideas, let us know.







Thanks,

-Steve






Here’s a link to a form that people can fill out if they can help. I will also add you as an editor to that form so you can make any changes to the language that you think would be helpful.

Our group’s facebook page is http://www.facebook.com/NYCMedics and our website is http://nycmedics.org

Our ‘specialty’ is to move quickly to find the underserved areas of the relief effort, which we are absolutely sure are many. In the South Asian earthquake in 2005 and in Haiti last year, there was a tremendous need that was ‘invisible’ to the press and large organizations for many weeks after the event. So we move quickly with a motto of ‘light & lighter’. This model requires help from local resources and our teams often sleep in the homes of strangers and work with anyone who will help them get the job done quickly. So a database of local contacts would be really helpful:)




Thanks for the help,