Comments on: Subprime Loan Crisis – It’s not just a matter of the U.S. economy http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-not-just-a-matter-of-the-us-economy/ Our blog about the Japanese market and consumers today Tue, 07 Feb 2012 11:15:25 +0000 http://wordpress.org/?v=2.5.1 By: Noriko http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-not-just-a-matter-of-the-us-economy/#comment-9 Noriko Tue, 05 Feb 2008 09:20:06 +0000 http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-%e2%80%93-it%e2%80%99s-not-just-a-matter-of-the-us-economy/#comment-9 Unfortunately, financial literacy of most Japanese polilticians is not deemed as high either... from a viewpoint of the general public. I believe this year is very critical for future growth of the Japanese economy. And this might be an opportunity for Japanese financial institutions to change the rules of the game. Unfortunately, financial literacy of most Japanese polilticians is not deemed as high either… from a viewpoint of the general public.

I believe this year is very critical for future growth of the Japanese economy. And this might be an opportunity for Japanese financial institutions to change the rules of the game.

]]> By: Ken http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-not-just-a-matter-of-the-us-economy/#comment-8 Ken Tue, 05 Feb 2008 07:25:53 +0000 http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-%e2%80%93-it%e2%80%99s-not-just-a-matter-of-the-us-economy/#comment-8 Good point on financial literacy - that's even being discussed in the States now, apparently! I think you're right that the public generally views this to be a dangerous time financially due to the subprime crisis. The Nikkei is about the only paper that criticizes government policy. But I wonder if the LDP will start taking heat over the economy, or if the DPJ is in any position to push on this issue. If a lower house election does happen this year, it will be very interesting indeed. Good point on financial literacy - that’s even being discussed in the States now, apparently!

I think you’re right that the public generally views this to be a dangerous time financially due to the subprime crisis. The Nikkei is about the only paper that criticizes government policy. But I wonder if the LDP will start taking heat over the economy, or if the DPJ is in any position to push on this issue. If a lower house election does happen this year, it will be very interesting indeed.

]]> By: Noriko http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-not-just-a-matter-of-the-us-economy/#comment-7 Noriko Mon, 04 Feb 2008 08:32:04 +0000 http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-%e2%80%93-it%e2%80%99s-not-just-a-matter-of-the-us-economy/#comment-7 Thank you for your comments. The impacts of the subprime on Japanese financial institutions would be updated further in early April, just after Japanese banks close the fiscal term. The point that this blog made is on Japanese attitudes as consumers - most Japanese people are very reactive to the news. Unfortunately, financial educations for "general people" in Japan are far behind the U.S. Most people, therefore, appear to be easily influenced by news etc. It is interesting to keep watching Japanese attitudes on financial products. Again, thanks for your perspectives. Thank you for your comments. The impacts of the subprime on Japanese financial institutions would be updated further in early April, just after Japanese banks close the fiscal term.

The point that this blog made is on Japanese attitudes as consumers - most Japanese people are very reactive to the news. Unfortunately, financial educations for “general people” in Japan are far behind the U.S. Most people, therefore, appear to be easily influenced by news etc. It is interesting to keep watching Japanese attitudes on financial products.

Again, thanks for your perspectives.

]]> By: Ken http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-not-just-a-matter-of-the-us-economy/#comment-6 Ken Sun, 03 Feb 2008 18:28:18 +0000 http://www.jdr-japan.com/blog/2008/02/01/subprime-loan-crisis-%e2%80%93-it%e2%80%99s-not-just-a-matter-of-the-us-economy/#comment-6 Interesting post. However, I think it's more correct to say that Japanese equities have been on a downward trend since the bursting of the bubble, or better yet, since December 29, 1989, when it hit its all-time high of 38,957.44. The run up in 2005 was significant, but did not reach the peaks of runs in 1996 or 1999/2000. While the fallout from subprime is certainly important, I think it's crucial to look at Ministry of Finance activities over the past few years. The creation and export of trillions of cheap yen fueled much of the global asset inflation we're now seeing fall apart. The motive? Keep the yen cheap and exporters further in the black. This has come back to haunt Japan since it put so much importance on the export-driven sectors of the economy - though that might be an historical necessity. The debate will rage over whether the current downturn is due to global turmoil or if blame can be placed on the incompetence of the Abe/Fukuda cabinets in terms of economic and fiscal policy. Both are probably to blame, though calibrating the scales to evaluate just how much may be difficult. Also, we need to keep in mind that Japan's decrease in credit loans is in large part due to stricter approval procedures by consumer lending firms, which are no longer able to charge the 29.9% interest rates due to new laws on interest rates for consumer loans. Interesting post. However, I think it’s more correct to say that Japanese equities have been on a downward trend since the bursting of the bubble, or better yet, since December 29, 1989, when it hit its all-time high of 38,957.44.

The run up in 2005 was significant, but did not reach the peaks of runs in 1996 or 1999/2000.

While the fallout from subprime is certainly important, I think it’s crucial to look at Ministry of Finance activities over the past few years. The creation and export of trillions of cheap yen fueled much of the global asset inflation we’re now seeing fall apart. The motive? Keep the yen cheap and exporters further in the black. This has come back to haunt Japan since it put so much importance on the export-driven sectors of the economy - though that might be an historical necessity.

The debate will rage over whether the current downturn is due to global turmoil or if blame can be placed on the incompetence of the Abe/Fukuda cabinets in terms of economic and fiscal policy. Both are probably to blame, though calibrating the scales to evaluate just how much may be difficult.

Also, we need to keep in mind that Japan’s decrease in credit loans is in large part due to stricter approval procedures by consumer lending firms, which are no longer able to charge the 29.9% interest rates due to new laws on interest rates for consumer loans.

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