Japan's Crisis: Guess Who Was There To Help?

From the Daily Beast:

• The worst of times sometimes brings out the best in people, even in Japan’s “losers” a.k.a. the Japanese mafia, the yakuza. Hours after the first shock waves hit, two of the largest crime groups went into action, opening their offices to those stranded in Tokyo, and shipping food, water, and blankets to the devastated areas in two-ton trucks and whatever vehicles they could get moving. The day after the earthquake the Inagawa-kai (the third largest organized crime group in Japan which was founded in 1948) sent twenty-five four-ton trucks filled with paper diapers, instant ramen, batteries, flashlights, drinks, and the essentials of daily life to the Tohoku region. An executive in Sumiyoshi-kai, the second-largest crime group, even offered refuge to members of the foreign community—something unheard of in a still slightly xenophobic nation, especially amongst the right-wing yakuza. The Yamaguchi-gumi, Japan’s largest crime group, under the leadership of Tadashi Irie, has also opened its offices across the country to the public and been sending truckloads of supplies, but very quietly and without any fanfare.
  
  The Inagawa-kai has been the most active because it has strong roots in the areas hit. It has several "blocks" or regional groups. Between midnight on March 12th and the early morning of March 13th, the Inagawa-kai Tokyo block carried 50 tons of supplies to Hitachinaka City Hall (Hitachinaka City, Ibaraki Prefecture) and dropped them off, careful not to mention their yakuza affiliation so that the donations weren't rejected. This was the beginning of their humanitarian efforts. Supplies included cup ramen, bean sprouts, paper diapers, tea and drinking water. The drive from Tokyo took them twelve hours. They went through back roads to get there. The Kanagawa Block of the Inagawa-kai, has sent 70 trucks to the Ibaraki and Fukushima areas to drop off supplies in areas with high radiations levels. They didn't keep track of how many tons of supplies they moved. The Inagawa-kai as a whole has moved over 100 tons of supplies to the Tohoku region. They have been going into radiated areas without any protection or potassium iodide.
  
  The Yamaguchi-gumi member I spoke with said simply, "Please don't say any more than we are doing our best to help. Right now, no one wants to be associated with us and we'd hate to have our donations rejected out of hand."
  
  To those not familiar with the yakuza, it may come as a shock to hear of their philanthropy, but this is not the first time that they have displayed a humanitarian impulse. In 1995, after the Kobe earthquake, the Yamaguchi-gumi was one of the most responsive forces on the ground, quickly getting supplies to the affected areas and distributing them to the local people. Admittedly, much of those supplies were paid with by money from years of shaking down the people in the area, and they were certainly not unaware of the public relations factor—but no one can deny that they were helpful when people needed aid—as they are this time as well.
  
  It may seem puzzling that the yakuza, which are organized crime groups, deriving their principal revenue streams from illegal activities, such as collecting protection money, blackmail, extortion, and fraud would have any civic nature at all. However, in Japan since the post-war period they have always played a role in keeping the peace. According to Robert Whiting’s Tokyo Underworld and Tim Weiner’s Legacy of Ashes, the US government even bought the services of one infamous yakuza fixer, Yoshio Kodama, to keep Japan from going communist and maintain order. Kodama would later put up the funding to create the Liberal Democrat Party of Japan that ruled the country for over fifty years. When President Obama visited Japan last year, the police contacted the heads of all Tokyo yakuza groups and asked them to behave themselves and make sure there were no problems.
  
  But let’s be clear, the yakuza are criminals, albeit with self-imposed restraints, and in their way may actually keep street crime (muggings, purse-snatching, theft) down. Many Japanese still admire or tolerate them. In fact, a Nara Police Prefectural police study found that amongst adults under 40, one in ten felt that the yakuza should be allowed to exist or were “a necessary evil.”
  
  There is an unwritten agreement amongst the police and the yakuza groups that is acceptable for them to perform volunteer activities during a crisis but not to seek publicity for it. Before the crisis the police were cracking down severely on the yakuza and any activity placing them in a heroic light might make the police look foolish. So they have been very quietly doing their part. It is not that the yakuza are not PR savvy, as is evidenced by their careful control and limited appearances in six fan magazines (three monthly, three weekly) that write of their exploits; it is that right now they care more about getting the job done than getting credit for it. As one members said, “There are no yakuza or katagi (ordinary citizens) or gaijin (foreigners) in Japan right now. We are all Japanese. We all need to help each other .....

From: http://www.thedailybeast.com/blogs-and-stories/2011-03-18/japanese-yakuza-aid-earthquake-relief-efforts/?cid=hp:beastoriginalsC1

Here Comes G7 And Pop Goes The...

And ... pop goes the yen.....

And ........ pop goes the N225.



http://www.forexyard.com/en/news/Yen-surge-raises-FX-intervention-risks-2011-03-17T154449Z-UPDATE-2

• Japan is expected to step into the currency markets to curb the yen's surge to record highs against the dollar and has a better chance of success if it wins the blessing of the Group of Seven industrial nations.
  
  G7 finance chiefs will hold a teleconference at 2200 GMT on Thursday and the foreign exchanges are abuzz with speculation that the meeting will address a sharp overnight surge in the yen that Japan has blamed on speculators.
  
  Japanese Finance Minister Yoshihiko Noda declined to comment on the possibility of currency intervention but said authorities were closely monitoring the market moves.
  Still, Japan's insistence that the surge in the yen seen since last week's earthquake in Japan is driven by speculation -- and the dearth of evidence to show Japanese capital repatriation is behind the move -- is prompting traders to brace themselves for sharper rhetoric and intervention.
  
  "If Noda is to be believed, i.e. that sharp yen gains are due to speculators rather than repatriation flows, then markets can be categorised as near disorderly," said Tom Levinson, currency strategist at ING.
  

http://www.reuters.com/article/2011/03/18/markets-forex-yen-idUSn3E7EI00X20110318

• Reuters) - The dollar spiked about 2 yen to above 81 yen on Friday, after the G7 agreed on joint intervention in the wake of the yen's surge to a record high the previous day.
  
  The dollar jumped to 81.20 yen from roughly around 79.20 yen. The dollar last stood at 80.65 yen, up 2.2 percent on the day, having pulled up from a post-World War Two record low of 76.25 yen hit on Thursday on trading platform EBS

http://www.businessweek.com/news/2011-03-17/boj-governor-shirakawa-s-statement-on-g-7-intervention.html

• “The Bank of Japan strongly expects that Japan’s concerted action with G-7 member countries in the foreign exchange market will contribute to the stable formation of foreign exchange rates.
  
  “The Bank of Japan will pursue powerful monetary easing and, to ensure stability in financial markets, will continue to provide ample liquidity.”

Marc Faber: They Will Just Print More!

On CNBC: If Market Keeps Falling, Fed Will Keep Printing: 'Dr. Doom'

• Falling stock prices will be met only with more money injections from the Federal Reserve, Marc Faber, the so-called "Dr. Doom," told CNBC.
  
  Speaking as global markets fell violently lower in the wake of the Japan earthquake and fears of a nuclear meltdown, Faber said a stock correction actually is healthy in view of how far equities have come from the March 2009 lows.
  
  He also expects weakness to persist and the Standard & Poor's 500 to drop as much as 15 percent. Further, Fed Chairman Ben Bernanke will likely give the green light to another round of Treasurys purchases, which have come to be known as quantitative easing, he said.
  
  "We may drop 10 to 15 percent. Then QE 2 will come, (then) QE 4, QE 5, QE 6, QE 7—whatever you want. The money printer will continue to print, that I'm sure," said the author of the Gloom, Boom and Doom Report. Later in the interview, he added, "Actually I made a mistake. I meant to say QE 18."
  
  As for the situation with Japan specifically, he said the end result of rebuilding after the quake would be inflation and a positive for stocks, while Japanese Government Bonds, or JGBs as they are often called, would suffer.
  
  "This huge selloff is an investment opportunity in Japanese equities, but if a meltdown occurs then all bets are off," he said.
  

What's The Current Risk With Japan's Nuclear Catastrophe?

Just read the following posting on ZH: TEPCO: With $91 Billion In Debt, Got CDS?

• Now that the market has had some time to digest the events over the weekend, it may be time to hedge risk on the company most exposed to the nuclear shock in Japan, Tokyo Electric Power Company. The company was just downgraded by Goldman Sachs to Neutral (which means it held it as a Buy until now) as the firm does not see "a dividend hike"... We see far greater issues for the company's equity investors than just a dividend hike. Number one: TEPCO (9501.T) has over $90 billion in debt and roughly $30 billion in equity buffer. As Bruce Krasting points out vis a vis the equity - "it's gone." More from BK: "I used to work on financing these things. It's all long term leases. The actual debt behind the power plants is multiples of what they show on the balance sheet."

Continued...

• Even S&P had some choice words to say about the company back in January:
  
  Standard & Poor's on Friday lowered the credit ratings of five electricity providers, including Tokyo Electric Power Co. (9501), or Tepco, and two city gas firms.
  
  The utilities were knocked down a notch to AA minus from AA in a move that echoed the ratings agency's cut of Japan's long-term sovereign debt a day earlier.
  
  In explaining the move, the U.S. rating agency cited the companies' "status as public utilities," noting that they are "crucial to the government's domestic energy policy." The Tokyo metropolitan government, Aichi Prefecture, and government-affiliated institutions were also downgraded to AA minus.
  
  By contrast, S&P affirmed the ratings of Toyota Motor Corp. (7203), Canon Inc. (7751) and other Japanese companies rated AA. They are likely to maintain their ability to meet financial commitments even if Japan defaults on its debt, explains S&P.
  
  

Glimmer Of Hope From Japan's Survey of Production Forecast in Manufacturing???

We all knew how bad Japan's industrial production numbers announced on Monday, Japan's industrial production falls for fifth month.

Especially when the seasonally adjusted index was down some 38.4% from the previous year.

Pretty darn scary!

• TOKYO (MarketWatch) -- Industrial production in Japan fell for a fifth month in a row, down 9.4% in February from the previous month, to stand at 68.7, according to data released Monday from Japan's Ministry of Economy, Trade and Industry. The seasonally adjusted index was down 38.4% from the previous year. Shipments were at 70.9, down 6.8% from a month ago. However, production is expected to increase 2.9% in March and to rise 3.1% in April, according to the Survey of Production Forecast in Manufacturing, the ministry said

However, the last line of that news clip, offered some hope. Survey of Production Forecast in Manufacturing said that production is expected to increase 2.9% in March and to rise 3.1% in April.

The Australian Business offers more insight with their article, Japan industrial production expected to rise

• JAPAN'S industrial production slumped 9.4 per cent in February, but for the first time since October manufacturers expect their outputs to rise.
  
  A Ministry of Economy Industry and Trade survey shows Japanese manufacturers expected industrial production to rise 2.9 per cent this month and by 3.1 per cent in April.
  
  Hopes that manufacturers are beginning to feel the bottom of the worst slump in 60 years were boosted by evidence of heavy inventory rundowns -- the inventory index fell 4.2 per cent, the sharpest month-on-month reduction on record.
  
  However, with monthly industrial output having fallen by 35 per cent since September, and the International Monetary Fund forecasting Japan's gross domestic product would shrink by 5.8 per cent through this year, the Tokyo Government is not ready to call a bottom.
  
  Releasing the February surveys, the ministry maintained an official view that Japanese manufacturing is still "rapidly declining".
  
  "The global economy is fraught with uncertainty," a ministry official told reporters. "We cannot say our country's production has bottomed out."
  
  And confirming the trend, new figures released yesterday showed output from the auto industry, a mainstay of export manufacturing, was still in precipitate decline.
  
  The Japan Automobile Manufacturers' Association reported that domestic vehicle production in February was down 56.2per cent, year-on-year.
  
  Exports, which account for more than half of Japanese auto production, were down almost 64 per cent in February -- and were 66 per cent lower to North America, Japan's biggest export market.
  
  The 212,107 Japanese vehicles shipped abroad in February was the lowest total in 34 years.
  
  At the same time, the METI survey showed inventories of small cars dropped 33.8 per cent in February and stocks of LCD television screens shrank by almost 26 per cent.
  
  Economists cautioned yesterday that inventory rundowns did not signal even the beginning of recovery, without evidence yet of any lift in US final demand for autos, electronic goods and components.
  
  Daiwa Institute of Research senior economist, Hiroshi Watanabe, yesterday questioned whether manufacturers' positive projections for March and April were too optimistic.
  
  However, the quickening improvement in inventories since January, when manufacturers began coming to grips with the huge stockpiles left by the collapse of export markets in the December quarter, is the closest thing they have seen to a green shoot in the past six months.
  
  "It seems some positive factors are emerging from Japanese industries after experiencing such severe export market shrinkage," said JP Morgan Japan senior economist Masamichi Adachi.
  
  "I don't think we can say industrial production has bottomed out yet, but now we are starting to see the bottom.
  
  "The inventory index has improved for machinery, and the same can be said for transport equipment and electricals. I would also add the steel industry," he said.
  
  "So it is fair to say the Japanese economy is starting to come out of its worst situation, although this is not yet a strong trend."