It's curtains for turbo-capitalism

By Henry Hilton

The good times are over. The nice years are history and the fact that Tokyo has emerged relatively unscathed from the global banking mess is going to prove scant consolation for the remainder of the decade and beyond. There is no way that Japan or the rest of the Asia-Pacific region can escape the turmoil that is continuing to hit the United States and the European Union.

Globalism is an increasingly uncomfortable reality that is surely due some urgent reassessment. The familiar mantra of a flat, interconnected world has indeed been proved to be correct, but with the nasty economic and human consequences that some thought had been consigned to the dustbin of economic history. Instead, the media in the West is full of flickering newsreels of the gathering crowds in Wall Street as the 1929 crash hit the United States and double-page reproductions of how the press reported President Hoover's response to the crisis.

We were repeatedly instructed that globalization could only work to the benefit of mankind as growth through interconnected trade and finance would be good for all of us. Everyone would somehow benefit in a borderless world where politicians would take a back seat and let the traders get on with it. The money-makers and the fund managers could then be left alone to spot opportunities and industrialists would shift their products from Nagoya to the docks at Yokohama and quickly on to the Californian ports without hindrance.

Now, of course, globalization is seen to be working in total reverse. The masters of the universe who strutted between New York, London and Frankfurt are now branded as spivs and speculators who had no interest beyond lucrative short-term gain. Their brand of capitalism stands condemned as way past its sell-by date. No one will touch their toxic waste. Banks who may not have fully known the risks of dicing up subprime paper are going under and recession looms in the West.

Where does this leave Japan? The United States and Europe have plenty of egg on their faces but it must be assumed that most of Japan's masters have got more than enough sense not to crow about the superiority of any Japanese model. Politicians and bureaucrats here are only too well aware of Japan's failings in its own lost decade and they know that the near-term prospects for the nation's economy are increasingly gloomy.

With Japan's growth figures down, unemployment up and inflation making its way through to supermarket shelves and car showrooms, the parallels with other nations are apparent. The talk of Asia somehow decoupling from the West looks to be another dream that has not turned out too well. Once the U.S. economy turns turtle, it will be near impossible for Japan's key exporters to seek out alternative markets to take up the slack.

The prospects are dismal. Japan had its own banking crisis in the 1990s and no one who lived through those years will easily forget how hard it was for the authorities to get Japan moving again despite interest rates that approached zero. Now that the West is going through bank runs, state-instructed mergers and general mayhem, Japan will have to sit it out and wait for the others to introduce greater regulation in their economic and financial systems.

Turbo-capitalism may be dead in the water but what follows is unlikely to be much fun either. Markets will be monitored more strictly and savings made far secure, yet the consequences are certain to be lower returns on capital, slimmer dividends for shareholders, and increased costs for those parking their money with those retail banks that survive the present cull. For now, laissez faire is out and government intervention is in. Welcome to the new world of global austerity.

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Altria stock is about as safe as you can get!

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The lesson from Japan's own meltdowns of the past is that intervention can only work if it is done quickly and comprehensively. It took a decade to recover (and, on the individual consumer level, I don't think Japan really has recovered at all), and that was before the financial industry was as broadly intermingled globally as it is today.

The one thing I think Japan can generally point to with some sense of pride is that--for the most part, excluding some rogue players like Murakami and Horie--they while they have had a lot of bad management, that management has seldom succumbed to the culture of personal greed that characterized so much of the leadership in the big U.S. companies who are now parading their sorry asses before Congress. Relative to the monetary damage, which now ranges in the trillions of dollars, a couple of hundred million may be a drop in the proverbial bucket, but the audacity it takes to continue to scoop water from the well for yourselves and your management cronies when you know the well's running dry is a mind-set you won't, for the most part, find here (outside of government, anyway).

The man considered most responsible for Lehman's collapse, who handled their credit swap business through their London office, is still drawing $1,000,000 a month in salary.

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Globalization was corporate propaganda to get us all thinking that an interconnected world was good for us. But for Joe worker in the A level nations it meant "goodbye jobs" and "hello uncertainty". The decline of the middle class in the US and in Japan is largely tied to companies shifting all those white picket fence supporting jobs to people willing to do them for a lot less money.

Ok. So sure we've benefitted from some of the downstream results of globalization, and if you are from India, China or Bangladesh you have benefitted. But the cycle has been shifting there too. Their new white picket fence owners are now fearful to see their jobs go to the next low wage paying nation. And now that markets are imploding, we are all wondering if there will be any demand for anything other than basics to keep us employed at all.

We've been sold a line of crap for two generations or so. Globalization is good. Corporations know best and will take care of everything. Government should stay out of business's way because business will get it right. Blah blah blah and so on.

But the facts are now here. We are mostly worst off. A lot of people have had to reinvent their lives when jobs fled to other countries. We are now so intermingled globally that a falter in one place has devastating ripples nearly everywhere. And there is very little control or oversight making sure that what is going on makes sense for the planet and the people on it instead of just making sense to raise stock values and turn a profit.

Profiteering is the new religion of much of the world. And look where it has gotten us. Globalization and deregulation made it possible and it is time to reverse it.

I say good riddance to the old way. It is time to make a more responsible and accountable way for the global economy to work.

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Japan and China is not expected to be hit for another 3 months but Japan may be hit hard before then. Japan has had 13 years of deflation and stagnation to sort out the banks and stuff them full of cheap money. The next hit will come from no export dollars and as Obama said today America needs to produce its own small green cars not buy them from other countries. Nearly every country is talking towards protectionism and the more people that loose their jobs the less atractive free markets are going to look to politicians who want to keep their jobs.

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The Nikkei is down nearly 10% FOR THE DAY!!!

Are people losing their minds or is this really the next Great Depression?!

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Nope, people are not losing their minds they did that when they gambled on shares with no real value pushing prices up to stupid levels. Like paying a $1000 for a 10 cent apple like before the first depression. Now people have their minds back and are saying "No way I'm not paying a $1000 for a 10 cent apple."

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Breathe deep the gathering gloom, see light fade from every room

Moody Blues, "Nights in White Satin".

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turbo-greed, not turbo capitalism.... but then no cure for greed

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Welcome to the new business global world.

Nations,companies,material products and banks that do well nowadays will be object of investments protection in future.

Another bubble made via global capitalism foolish gets caught and exposed from hiding.

Pushing prices up to nonsense bubble levels is foolish ways of some global companies.

Now that they have been exposed,it makes global economy change for economic good better.

Global economic flux change is coming everywhere in present global economic scenario.

There is now many oppurtunities for those who have money to buy up companies caught in the bubble globally.

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The new economic paradigm: Pay as you go, no more credit. This will also apply to the balance of trade.

Meet the new boss, same as the old boss.

And those countries that played the mercantile trade surplus game, decade after decade, will have the most to lose in the future.

As the world heads into deep recession, does anyone in Japan believe they can export their way out of this mess? Thus spoke the Nikkei market today.

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Days after it got a federal bailout, American International Group Inc. spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown. Says AP

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I agree with the turbo-greed statement. Just maybe the level of economic growth is simply unsustainable anywhere at anytime. The $600 000 house with Hummer and a speedboat in the driveway is too greedy. Why do people need to live so extravagantly? As for the corporate bigwigs who caused this whole problem, they are even worse. Be realistic everyone.

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Louis Ferdinand Celine said in Journey to the End of the Night something to the effect of this. (I do not quote exactly). It is truly sad that the ultimate goal of the human race is the acquistion of wealth. With our large brains and all the things we are capable of doing, is this all that people have come down to? This was written in the 1930`s. I think his observation has never been more true than now.

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Meiwaku, the very fact that your paraphrase came from a novel says to me that humanity does have other driving forces as well. There are still lots of authors artists and directors who are not in it for the money. They create beauty without the desire for material wealth. So, acquiring wealth is not what it all comes down to. Free the artist in yourself, and go after those simple pleasures. And when those working 15 hours a day to pay off the things they've acquired start laughing at you for your lack of wealth, well then hell, laugh back.

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This may be a good chance for many of us to change our wasteful lifestyle.

If this hyper-growth of globalization means over-consumption/production turning our planet into one huge trash dump of meaningless junk under a sooty sky, it may be better not to attempt another over-stimulation beyond a sustainable level.

Too much greed is like obesity and totally uncool.

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MeanRingo. I was not referring to myself. I am well aware of the beauty of the world. And I know there are exceptions but for most people money is the be all and end all. Look at the mess the world is in because of it.

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As posted several days ago, I do not believe the US will pursue the multilateral route in the Asia Pacific, but Japan can do something.

Japan to table emergency IMF loan scheme for emerging nations WASHINGTON, Oct. 10 KYODO Japan will propose creating a scheme under the International Monetary Fund to offer emergency loans to emerging nations to assist their efforts to deal with the financial crisis, Finance and Financial Services Minister Shoichi Nakagawa said Thursday night.

''Japan is prepared to exercise leadership and make a significant contribution to financially supporting (emerging) economies through the IMF so as to minimize chain reactions'' in the ongoing turmoil of global financial markets, he said upon arrival in Washington.

Nakagawa told reporters he will suggest the idea at the one-day meeting of Group of Seven finance ministers and central bankers on Friday in the U.S. capital. The G-7 groups Britain, Canada, France, Germany, Italy, Japan and the United States. Under the scheme, Japan plans to funnel money from foreign reserves worth about $1 trillion to create a cash pool, and provide emergency loans via the IMF to help emerging nations inject public funds into their troubled financial institutions, Japanese government sources said. Tokyo is expected to seek financial support from other cash-rich countries such as China and oil-producing nations in the Middle East to join the scheme, the sources said. China has the world's largest foreign reserves and Japan ranks second. The envisioned emergency loan scheme is expected to amass several hundreds of billions of dollars including $200 billion to be provided by the IMF, they said. The IMF is expected to provide loans to emerging economies hit by the financial crisis on condition that they submit a financial reconstruction plan involving the disposal of bad loans. The latest development comes as the financial turmoil stemming from the U.S. subprime mortgage crisis has spread to Europe and other emerging nations in the world. In Europe, Iceland has been on high alert as a massive outflow of bank deposits has put the country's finances in dire straits.


If PM Aso reads JT, this is the route to pursue, using all contacts Japan has in the upcoming multilateral meetings coming up soooooon. Depending on when the elections occur, this is relevant also to the the DPJ Party. These are historic times and Japan could affect the eventual outcome for better or worse. Probably could do more if I went to Peru, but air travel these days sounds to be a pain.

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