Japan's Radioactivity Rising as is Economic Fallout
Kyodo News
Woes deepen over radioactive water at nuke plant, sea contamination
TOKYO, March 28, Kyodo
Japan on Sunday faced an increasing challenge of removing highly radioactive water found inside buildings near some troubled nuclear reactors at the Fukushima Daiichi plant, with the radiation level of the surface of the pool in the basement of the No. 2 reactor's turbine building found to be more than 1,000 millisieverts per hour.
Exposure to such an environment for four hours would raise the risk of dying in 30 days...
Morgan Stanley:
Japan May Contract at a 6% to 12% Annualized Rate Next Quarter & 1% to 3% For All of 2011
Japan Likely to Fall Back into Recession
Our Japan economics team has provided a first, very tentative assessment of the impact of the destructive series of earthquakes and the tsunami. Estimates of the damage to the public infrastructure and private capital stock are highly uncertain at this stage, as are any forecasts for the path of output and demand, especially as the nuclear problems are still unfolding. Bearing these immense uncertainties in mind, and assuming that the nuclear problems can be brought under control relatively soon, our team thinks that Japanese GDP could contract by between 1% and 3% in calendar 2011, which would constitute a shortfall of 3-5% compared to our pre-quake forecast of +2%. For 2012, the team looks for GDP growth in a range of -1% to +3%, compared to a pre-quake 2012 forecast of 1.9%. Output and demand look set to contract very sharply in 2Q11 and by somewhat less in 3Q, followed by an economic rebound later this year and in the first half of next year, helped by several shots of fiscal stimulus envisaged to be implemented incrementally in 2011 and 2012, totaling several tens of trillion yen. These packages would likely be financed by debt issuance and spending cuts. The Bank of Japan is expected to further enlarge its asset purchase program and JGB purchases, thus effectively monetizing government debt.
Bloomberg
Sony Shuts More Plants in Japan, Toyota Extends Halts as Recession Looms
...Sony, Japan’s biggest exporter of consumer electronics, suspended some work at five plants in the central and southern regions until March 31 because of trouble getting supplies after power outages, the Tokyo-based company said in a statement yesterday. Toyota, the world’s biggest carmaker, said yesterday all domestic car-assembly will be stopped until March 26, while Honda Motor Co. also extended closures.
The moves come as Morgan Stanley estimated that damage to the earthquake-stricken northeast, including disruptions to power and distribution systems, may cause the world’s third- largest economy to shrink in the second quarter at an annualized rate of 6 percent to 12 percent. A recession is “almost certain,” according to Mizuho Securities Co.
“Companies’ production and people’s consumption will be stuck in an abnormal state at least for the next six months,” said Naoki Iizuka, a senior economist at Mizuho Financial Group Inc. in Tokyo. “The electricity shortage will continue to hamper economic activity.”...
The Epoch Times
Crises in Middle East and Japan Threaten Another Recession
By Peter Morici
Crises in the Middle East and Japan threaten to thrust the U.S. and global economies into a second recession.
Since the economic recovery began in July 2009, GDP growth has averaged only 2.8 percent, a pace insufficient to bring unemployment down to acceptable levels. And that rate of growth leaves the economy too vulnerable to the slightest hiccup and a deceleration into recession...
A surge in the price of oil to $140 a barrel and an enduring crisis in Japan would do it. Growth would slow to 2 percent, businesses would start laying off workers, and voila it’s Armageddon.
The bankers may poo poo all this. After all Ben Bernanke will lend them more money at zero interest rates, they will trade on oil futures and restructure Japanese debt, and pay themselves big bonuses, again. You watch!
As for China, its mercantilist policies and hoard of dollars, euro and yen will permit it to avoid the worst of it. More stimulus spending-that must be used to procure only Chinese goods-to meet long neglected needs in health care, education and the like, will keep its economy humming and gaining ground on the West.
But Washington-watch out! A second recession would be enough to put federal finances in the same box as the more troubled states and maybe Greece. The $9.5 trillion ten-year deficit projected by the CBO could easily jump to $15 or $20 trillion and the bond vigilantes could force Washington to merely print money-the interest rates Washington would have to pay on new bonds would become prohibitive.
Hyper inflation and a terrible second recession, or worse, could follow.