Sunday, September 29, 2013

Very Sprite, Alert and Healthy 97 Year Old Guy Gives Tips for a Long Life

I am reposting (slightly altering) this post from March, 21 2013, because this dear man, Yasuyuki Hashimoto, passed away late last night. Thankfully, he wasn't in pain and passed quietly.

Hashimoto san lived to be 97-years-old. He was very spry and alert just up to about 12 weeks ago. Then his health rapidly began to decline. I was very surprised to see how fast it was. 

It just goes to show us all how fleeting the wonders and joys of life can be.

Please read this story of the wonderful man and remember to enjoy and cherish all the wonderful things this short life gives us. Remember to live each day to its fullest. Tomorrow comes too soon.

And now the article....

I have been written a lot about philosophical things like life & deathpurpose, respect and dedication as well as choosing a partner well. Today, I'd like to introduce to you a guy who I have met in these last few days that has really blown my mind. I also want to share some of his philosophies on living a long life. I'm sure you will get a smile and a laugh as I did.

I am so glad to introduce you to this fascinating man. You'll be glad you met him too! His name is Yasuyuki Hashimoto and he is 97-years-old. I suppose being 97-years-old is pretty cool but, in Japan, it's not that unusual. The thing amazing about Yasuyuki Hashimoto is that he is 97 and must the one of the brightest, most energetic, alert and healthy 97-year-old folks you'll ever meet... He's totally coherent and he stays in the conversation and is not hard of hearing. 

Yasuyuki Hashimoto 95-years-old  March 2, 2011

Not only that, but Yasuyuki has never been admitted into a hospital in his entire life!!!

Get that? Of course Yasuyuki has visited doctors before, but he has never stayed overnight in a hospital in his entire life. Can you believe that!? Wow! He must be some sort of miracle of science.  

But I guess he's not a miracle of science. Yasuyuki was a guy who worked hard and played hard too! Yasuyuki told me about the old days when he was a salesman for Ishikawa Heavy Industries (IHI) and he said he smoked about 1.5 packs of cigarettes a day and drank to excess nightly.

As a salesman for IHI in the 1950's

"Mike, as you know, in Japan, salesmen must drink with their clients. I was a good salesman so I was drunk often." Yasuyuki said. His 63-year-old son added, "What!? You were drunk every night!" Looking at me the son added, "Sometimes he would pass out in the street and we'd have to carry him home. ."

Yes. Yes. I can relate to that... (Thank god, I don't do that anymore! - Mike) 

"Excuse me, bartender! I'll have what he's drinking!

Anyway, Yasuyuki says he stopped drinking 5 years ago and stopped smoking about 15 years ago.  

Yasuyuki in army uniform looking a lot like 
Erwin Rommel (circa 1942)

I have met many 70-year-olds that weren't half as spry and alert as Yasuyuki is. This guy is simply amazing! Yesterday we had lunch together and we were talking about old times and he was joking about how much he used to like to drink to excess (something that I can definitely relate to). His conversational abilities are incredible.... And I don't mean incredible for his age, I mean, he's glib and funny and tells jokes! 

Wow! I hope that I can be 1/2 as bright and bushy-tailed as Yasuyuki is when I'm 80! In fact, when Yasuyuki was 80 years old, his son told me of a time that his father met a stewardess at a bus stop and wound up with the young lady accompanying him back home. Imagine that! You have an 80-year-old dad who is very peppy, energetic, red-blooded and robust guy showing up back at home with some pretty 30-some year old airlines stewardess! Wow! You can't make this stuff up.

Yeah. When I grow up I want to be just like Yasuyuki Hashimoto!   

Yasuyuki as a junior high school
student circa 1930 (back row - upper right)

Yasuyuki Hashimoto was born in Tokyo in 1916. He went to school in Tokyo and was conscripted into the Imperial Japanese Army immediately after university. During the war, in 1942, he was stationed in Indonesia and say he spent his time enjoying the country and fishing.

There were no big battles in the area his unit was stationed in. He did say, though, that American planes would come snooping around everyday and some of the rascals in his unit wanted to shoot at the plane, but cooler heads prevailed. Yasuyuki and the others knew that if they shot at the plane, the Americans would just come back tomorrow with more planes, so they left them alone (kind of like not whacking a hornet's nest).

He said he and his fellows soldiers would stand around and look at the plane as it flew around. The planes were so close that they could see the pilot's face! They'd stare at the pilot and the pilot would stare back and  then fly away.

This theater of the absurd went on for everyday until the end of the war.

Out with the boys on the field in Indonesia 1942

About the war, I asked Yasuyuki if he and his fellow soldiers believed that the emperor was god? Yasuyuki looked incredulously at me and said, "No! Are you kidding? We weren't that stupid!" We both then howled with laughter.

Yasuyuki has many funny and interesting stories. I wish I could share them all with you.

Student conscripts in front of Mt. Fuji (circa 1940)

I did, though, ask Yasuyuki two important questions. The first was, "What is the secret to long life?"

Yasuyuki answered, "Live a boring, peaceful life." 

That makes sense. It reminds me, once again, of the Chinese curse, "May you live in interesting times." Yasuyuki's advice fits in well; peace and serenity and quiet and calm; those are the secrets to a long life. 

I think it is good advice. I hope that I can live a boring life someday spending quiet time with my family and fishing and living among nature.

Yasuyuki Hashimoto (back row, third from right)
(circa 1942)

The second question I asked Yasuyuki was, "Do you have any advice for readers as to how to live a happy, peaceful and long life?" 

To this Yasuyuki thought for a moment and said, "No. The best advice I can give anyone is no advice. I don't like it when people are always giving out advice. I have no advice to give."

Think about that, dear readers, isn't that just like Zen Buddhism? In a word, Yasuyuki's advice can be summed up as, "The best advice is no advice!"

Wow! I am taking that to heart. Think about it, folks. It's true!

The best advice is no advice! 

Yasuyuki Hashimoto san! Thank you for everything. May god rest your soul...

And for you reading this, take a moment to be thankful for all you have; give your spouse and kids a hug.

Be happy.

Tuesday, September 24, 2013

The Facts: Data Doesn't Lie and "Positive" Writing

Yesterday I met a dear friend of mine. He complained about this blog. He said to me, "Why do you always write such negative things? Why don't you write more positive things about what Abe (Shinzo) is doing? Exports are going up!"

I replied, "Japan just had 14 months of trade deficits in a row for the first time in modern history. Last month was the worst trade deficit in history. Exports went up 14% but that was after more than a 25% decrease in the value in the yen since October 2012 (15% this year alone), which actually, considering accrual accounting, means that exports went down 9% since Oct. 2012."

That was all I said.

BNP Paribas just reported that they estimate that Abenomics will fail. Please refer to: BNP Paribas Gives Abenomics Only 10% Chance of Success? 

I write this stuff because (may I brag?) I'm usually ahead of the curve. I've been complaining about Abenomics since October of 2012... It, seems to me, was easily predictable what was going to happen. I'm glad to see big financials finally coming around and supporting my views.

I don't know how anyone can put on a happy face and spin that into anything positive for the economy... But people do. I seriously doubt that reporting this sort of thing in a positive spin makes it any more potable. 

Look, there's responsible fiscal policy and then there's what the Japanese government (and US government, EU, etc.) are doing: irresponsible deficit spending. Japan has been doing what Abe is doing for over 20 years. The only difference is that Abe has put the deficit spending into hyper-drive.

Over twenty year of deficit spending and infrastructure projects? Look where it has gotten Japan today.

Folks, you couldn't deficit spend like this on your own home and personal finances; you'd go bankrupt. This isn't rocket science. No matter what the government says or how they try to spin things, this is simple math. Mathematics are a bitch and they are consistent as hell. Two plus two will always equal four. It doesn't change.

Japan's low interest rates and easy money policies on steroids will not yield any different results than they already have.

Yahoo reports a week ago in: Analysis - Japan faces record-long trade deficit, little sign can reverse trend

Japan is on course for its longest run of trade deficits, effectively marking the end of the nation's decades-long reliance on exports from the likes of electronics giant Sony and automaker Toyota as a driver of growth and income. Trade figures due on Thursday are likely to show that Japan produced its 14th consecutive deficit in August, matching a 1979-1980 record run during the global oil shock. Economists say the deficits will continue. When Prime Minister Shinzo Abe's reflationary policies weakened the yen after he took power last December, many economists had anticipated a so-called J-curve effect, where a spike in import costs would over time be more than offset by gains in exports. But a closer look at trade statistics shows that the currency's 15 percent decline since the beginning of this year has failed to produce the export turnaround needed to bring the trade balance back into the black and there is little indication it will do so in the future.

Do we need a positive spin on that? How about if they added, "Wonderfully" as the first word in the paragraph?

Like I said, facts and data don't lie. People have lost their ability to take things into perspective. Here's some perspective for you folks who think what Abe is doing is good:

In The Money Stocks reports in Quantitative Easing On Steroids

"The Bank of Japan has stated that they will implement monthly bond purchases in the amount of 7.5 trillion yen (US$78 billion) per month in an attempt to increase inflation to two percent within the next two years. Currently, the United States is buying $85 billion worth bonds every month. It is important to note that Japan's economy is one third of the size as the United States. So it is safe to say, Japan has the printing presses on turbo at this time."

Get that part? Bank of Japan is implementing bond purchases at $78 billion (USD) per month. The Japanese economy is one-third the size of the US. People are up in arms and complaining about so-called "Quantative Easing" in the USA and how that is destroying the US economy... Yet, in comparison of apples to apples percentage of GDP, Japan is spending three times the US!

How does anyone put a positive spin on that? Let's try multi-billionaire Marc Faber... He says of the USA:

"The endgame is a total collapse, but from a higher diving board. The Fed will continue to print and if the stock market goes down 10% they will print even more. And they don’t know anything else to do. And quite frankly, they have boxed themselves into a corner where they are now kind of desperate."

Now, multiply that times three for Japan.

Great! Next up, how does anyone put a positive spin on this chart? The numbers don't lie; politicians and economists do.

For the eight month period, the trade deficit hit a record of ¥6.8 trillion, up 66% from the same period in 2012, and up 332% from 2011. During that period in 2010, Japan had a surplus of ¥4.2 trillion! Japan’s trade fiasco is on a steep downward slope. August was the worst August ever, July the worst July ever, June the worst June ever.... There’s no discernible turning point on the horizon. See more:

Like I said, I don't know how to put a positive spin on this sort of data. I'm not talented enough to do that. I do know that when someone reads this and then they get frustrated because "It's all negative news (on this blog)" Then they are making the mistake of attacking the messenger and not the message.

Ignoring bad news and facts and data do not make them disappear.

When a drunk or drug addict or someone with a gambling addiction has a problem, the first thing they have to do is admit it and then look for ways to do something about it. I am merely reporting the facts.

When someone does comes up with new math that can make these bad numbers magically become good, then let me know.

If you want to read happy stuff about the economy, you've come to the wrong place... Hopefully, that situation will only be temporary... But at the way way Shinzo Abe and Japan is going... That won't be soon.

Oh, that sounds negative too! OK. How about this? 

"In a positive note: If you want to read happy stuff about the economy, you might not be in the best place, but you could do worse!. Hopefully, that situation will only be temporary... But, I am absolutely POSITIVE that, at the way way Shinzo Abe and Japan is going... That won't be soon."

But as my wife would say, "If you're so smart, why ain't you rich?"

Saturday, September 21, 2013

BNP Paribas Gives Abenomics Only 10% Chance of Success? - I Think They Are Way Too Optimistic

There's a very interesting article over at Zero Hedge from BNP Paribas parsing out the chances of success for Abenomics. 

Everything is under control!

The article is entitled: BNP Warns Only 10% Chance That Abenomics "Ends Well." Here's a few snippets:

Japan’s core CPI (which excludes perishables) surged 0.7% y/y in July, but the upturn is largely due to higher prices for energy that reflect rising import prices due the yen’s weakness. Despite global exuberance at Abe's "progress", BNP notes that there are still no signs of price growth for rent and service prices, factors behind Japan’s protracted deflation. Crucially, BNP believes that Abenomics could lead to four possible medium-term outcomes: (1) Continued deflation (35% probability), (2) Financial repression (40%), (3) High inflation (15%), and (4) Happy end to deflation via revived trend growth (10%).

On the continued deflation 35% possibility...

Under this scenario, the economic euphoria, yen depreciation and stock market rally triggered by the BOJ’s new dimension in monetary easing (QQE) will be found to be just momentary things based essentially on placebo-like effects. On this score, ever since stock market corrections began from late May, various sentiment indicators have peaked out and started trending lower....

The BOJ’s Kuroda has declared that open-ended easing will remain in effect until 2% inflation is achieved. Because of this, many might feel that this scenario should not have a very high probability. But, as pointed out above, because the long-term interest rate is already very low, no matter how much the BOJ inflates its balance sheet with aggressive purchases of long-term JGBs, the effects will be meager. 

On the 10% chance of success...

Now If Abenomics’ growth strategies were to show dramatic success, allowing the trend growth to significantly revive, the resulting improved growth expectations could encourage households and businesses to increase spending, thereby fostering improvements in the output gap that bring an end to deflation. While ending deflation via revived trend growth would be a happy ending, the probability of this optimal scenario is just 10%.  

We cannot assign a higher probability because growth strategies, even if successful, do not bring dramatic changes. Currently, the government hopes to achieve trend growth of 2% over the coming decade, but that means the per capita trend growth rate will have to climb to 2.7%. Over the past 30 years, the only time per capita trend growth ever approached 3% was during the bubble in the latter half of the 1980s. If we assume that the workforce will continue shrinking almost 0.7% annually (and this figure prices in higher employment rates for women), increasing the per capita trend growth rate from the current 1% to 1.5% will still put overall trend growth at just 0.8%. Seeing how the per capita trend growth rate in America is slightly over 1% and that of the EU about 0.5%, hoping for 1.5% would be very optimistic. The government, however, aims for an even higher target (2.7%) and there is no magic wand to achieve it.  

Now even if this happy ending scenario were to unfold, that does not mean that structural problems, like the swelling public debt and insolvent social welfare, will be headed for resolution. 

Yep. The last line is the killer. The structural problems are not being addressed at all: the debt, bankrupt social welfare... It's better for the government to kick the can down the road...

Ten percent? Really? That's way optimistic, guys. The two biggest reasons why this growth won't happen are:

1) Demographics and aging Japan along with a severe decline in the workforce. Please refer to: Japan’s deflation is a product of shrinking work force, not policy:

In his first testimony before the Diet last week, Bank of Japan Governor Haruhiko Kuroda noted, “Japan’s economy has suffered from deflation for nearly 15 years. This is an extraordinary situation even on a global scale.” 

We would supplement Kuroda-san’s statement with the observation that the working-age population and employment have also been declining for 15 years. This is no coincidence... deflation is a natural consequence of a declining labour supply, as long as technological innovation persists at a faster pace than employment is shrinking. We therefore predict that no amount of monetary stimulus can reverse the trend decline in prices: The roots of Japan’s deflation are not monetary. 

Calculations by High Frequency Economics show quarterly employment in Japan has declined 5 per cent since 1998. As Japan’s huge demographic cohort of baby boomers ages, they are leaving the work force.

2) The devaluation of the yen hasn't shown any good results overall yet. Last month, Japan hit it's 14th straight month of trade deficits and the largest trade deficit in history! From Yahoo: Japan trade deficit swells 25 percent in August

Japan's trade deficit swelled to a larger-than-forecast 960.3 billion yen ($9.8 billion) in August, the 14th straight month of red ink, as imports outpaced growth in exports, customs data showed Thursday.  Boosted by higher fuel costs, imports rose 16 percent from a year earlier to 6.74 trillion yen ($68.7 billion) while exports climbed 14.7 percent to 5.78 trillion yen ($58.9 billion). The deficit was a quarter bigger than the 768.4 billion yen gap seen in August 2012.  In surplus for years, Japan's trade account fell into deficit after the March 2011 earthquake and tsunami on Japan's northeastern coast caused meltdowns at the Fukushima Dai-ichi nuclear power plant. With all nuclear plants offline for safety checks or maintenance, imports of crude oil and natural gas have soared.  Costs of imported fuel, which comprise more than a third of all imports, rose nearly 18 percent in August, despite a slight decline in volume.

So, uh, how's that yen devaluation working out for Japan so far? Not good. And with all of Japan's nuclear power plants offline (and Fukushima in the headlines - everyday) there's no foreseeable chance they are going back online anytime soon.

Testosterone Pit slams more nails into the coffin. Please refer to: Trade Is Supposed To Save Japan, According To The Gospel Of Abenomics, But In Reality... 

Trade is one of the aspects that Abenomics has designated as critical. So the Bank of Japan has embarked on a radical money-printing program to devalue the yen and make exports more competitive. The principle of a currency war. It would also render imports so expensive that buyers would seek domestic alternatives. The resulting trade surplus would save Japan. In theory. 

In reality, the opposite is happening.  Exports did jump 14.7% in August year over year, the Ministry of Finance reported. But the rest was ugly. Exports were valued in yen, and the yen had lost 20% of its value over the year. So in most categories, export volume actually declined. 

But Imports jumped 16%, from a higher base, and the trade deficit soared 25% to ¥960.3 billion ($9.6 billion). Analysts were shocked.  It was the worst August trade deficit ever. It was the 14th month in a row of trade deficits, matching the longest such spell of 1979-1980. It was 27% higher than the trade deficit of August 2012. By comparison, in August 2010, Japan had a surplus of ¥63.8 billion; in August 2009, a surplus of ¥165 billion; in August 2007, a surplus of ¥784.6 billion! 

For the eight month period, the trade deficit hit a record of ¥6.8 trillion, up 66% from the same period in 2012, and up 332% from 2011. During that period in 2010, Japan had a surplus of ¥4.2 trillion! Japan’s trade fiasco is on a steep downward slope. August was the worst August ever, July the worst July ever, June the worst June ever.... There’s no discernible turning point on the horizon.

Darn those facts and data! Don't you just hate it when facts and data get into the way? The data looks real bad, but Abenomics has 100% hope... Though "Hope" has never really been a good business plan...

Ten percent chance of success? Like I said, I think that's way too optimistic. Deflation was the best thing to happen to the country in a long time... It, despite government meddling, was a result of free market forces. There's no way a bunch of bureaucrats sitting in some back office could possibly know better than free-market forces what prices should be and there's also no way they can stop forever the power of free-market forces; sooner or later this is going to end badly (probably sooner since Japan's debt is 240+% of GDP). 

Abenomics is nothing more than a continuation of Japanese government policies of huge deficit spending since 1989 (on steroids).

Has a government manipulated economy ever succeeded in history?

Abenomics has a zero to 1% chance of success... 

Am I too optimistic?


On a related article about out of control government spending, please read: After Thoughts on Tokyo Being Awarded the 2020 Olympics - Will Tokyo 2020 Lose Money?... What Do You Think?

Thursday, September 19, 2013

There is No Gold at The US Federal Vaults? Won't Allow Germany to See the Gold - Won't Give Back Germany's Gold

The scam continues. Germany stores about half its gold in New York. Germany is suspicious of the US dollar and the Fed and asks for their gold back. The Fed says "that's impossible." They claim that they couldn't fill the order until 2022 (Even though German's gold is supposedly less than 5% of all Fed gold holdings). The Germany asks to see their gold. The Fed says, "No!"

Listen closely at about 2:10, in which during WW2 the Fed convinced Asian and African nations to store their gold in New York in exchange for Federal Reserve gold certificates, but when those nations tried to trade those certificates back to the Federal Reserve to recover their gold, the Federal Reserve claimed their own gold certificates were fakes, and kept the gold.

Sunday, September 15, 2013

Total Media Manipulation Equals Control of the Average Population

I constantly rail on mass media sensationalism and media propaganda and manipulation of the the masses... I speak from an insiders point of view. In fact, it's so bad that I even meet people at some of the broadcasting stations that I work at who don't question, even for a moment, the propaganda that comes over the newswire... They just blindly come in to work, do their programs, and then, oblivious that they are part of the propaganda machine, they head home to come back and repeat the same drivel tomorrow...

Lather, rinse, repeat. 

Now, my good friend, Jp, sent me this interesting video and article. Let me reproduce it in full for you. From the Minds blog:

"This video is so ridiculous that it actually makes you want to punch through the screen.  There are multiple clear cases of this 'talking point distribution' happening where it's obvious that some puppet masters literally surgically insert their neural implants into the minds of the masses as if we are all numb to the fact that a handful of corporations control all the mainstream media. 

Linked below is another fascinating clip of the CIA admitting that they use the news to manipulate the USA.  This is why the rise of independent media is critical for a positive transformation of the planet.  There are some who would say that this phenomenon is a result of stuff like the AP wire and is nothing more than laziness of news anchors and affiliates.  This is partially true, but definitely not completely.  And even if it is largely a true statement, what does that mean?  It means that unconscious and lazy drones are feeding us talking points from the largest agencies?  Is that healthy?  No!    

It needs to be said that in no way is this article intended to say that ALL mainstream news is 100% corrupt. (Only 90% corrupt - Mike) 

Much good reporting is done from unexpected places, but, there is a trend.  And it is a dangerous one.  Of course, in the opinion of this writer, there are also deliberate thought implants surgically inserted into society to boost ideas, kill others, and so on.  

Thanks to Jp Valentine

Saturday, September 14, 2013

2020 Tokyo Olympics - Bubble, Boom, Bust (Out of Control Gov't Spending & Tax Increases...) Oh, and Don't Mention Fukushima!

“The price of anything is the amount of life you exchange for it.” ~ Henry David Thoreau

Before I go on, let's do some chemistry (oh, I wish!) First off, the elements. I'd like to point out to you, the newest discovery in the elements and that is Governmentium. It is the heaviest of all elements, yet it does absolutely nothing good. It just expands. See the red box at the lower left:

Governmentium: Inert, worthless.

The Urban Dictionary says:

The heaviest chemical element yet known to science. Governmentium (Gv) has 1 neutron, 12 assistant neutrons, 75 deputy neutrons, and 224 assistant deputy neutrons, giving it an atomic mass of 312. These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons. Since Governmentium has no electrons, it is inert. However, it can be detected as it impedes every reaction with which it comes into contact. 

....Governmentium mass will actually increase over time, since each reorganization will cause some morons to become neutrons, forming isodopes. When catalyzed with money, Governmentium becomes Administratium--an element which radiates just as much energy as Governmentium since it has half as many peons but twice as many morons.

Keep that information about Governmentium in mind while you read today's post.

In my last few postings, I complained about the 2020 Olympics coming to Tokyo. Actually, not exactly that; I complained about how the government will use that as an excuse for out-of-control spending and the subsequent taxation.

Well, lo and behold, not 5 days have passed and the hammer has come down. Japanese Prime Minister Shinzo Abe has pronounced that he is going ahead with the increase in sales tax. From the Japan Times "Abe to raise sales tax to 8% as scheduled - More stimulus in works but critics fear hike will hobble recovery":

"Prime Minister Shinzo Abe has decided to raise the consumption tax rate to 8 percent next April as planned, emphasizing the need to demonstrate fiscal discipline by making good on a pledge to the international community, a source close to him said Thursday." 

Oh? So finally this guy wants to show some "fiscal discipline" concerning the Japanese debt to GDP problem? Great. He also admits that a sales tax increase will most probably slow down the economy... He wants to show the critics that the tax increase will not slow down the economy, so what does he do? In true Keynesian fashion he is going to spend more money! The Japan Times article goes on with a laugher and total contradiction of the "fiscal discipline" comment Abe made (polite laughter here).

"Abe, who has been trying to shake the economy out of nearly two decades of deflation, is also considering implementing a stimulus package worth ¥5 trillion to prevent the tax hike from slowing down the economy, the source said." 

See? We have to show fiscal discipline (translation: controlling government spending) by increasing government spending. Let me rephrase that: We have to show some fiscal responsibility by spending more money!

What did I tell you? Throw that ¥5 trillion (¥5 trillion yen? Is that $50 billion USD?) on top of the ¥10 trillion (is that $100 billion?) - it will be much more, you'll see - they plan on spending on the Olympics and you have the government spending $150 billion dollars on crap. ONE HUNDRED AND FIFTY BILLION US DOLLARS!!!!

Ah, but it's just a drop in the bucket, right? The Japanese government is already at least $10.46 trillion dollars in debt - that's nearly 250% of GDP? Another $150 billion is a drop in the bucket, right?

I'll bet lots of people who were cheering the Olympics slapped themselves on the forehead when they heard the news about the tax rise. I didn't. I just thought, "See? I told you so." You just knew that the 2020 Olympics coming to Tokyo would serve, for now, merely as a green light for MORE out of control government spending.

They already said they were going to spend about $10 billion USD... Like I said, I bet you a half a bento it will be waaaaaaaay more than that!

"...The cost of Tokyo’s bid fell between $5 billion and $6 billion. That includes the construction of 11 new sporting venues and 10 temporary ones, at a cost of $3 billion. The Olympic village will cost another $1 billion, according to the IOC.

See? It works already! Like I said, the Olympics are an excuse for more out of control government spending and, with that, a cover to increase the sales tax... It's funny that when the former government who made this tax increase passed the law, Abe and his cronies were against it... Now they are for it.

Who said that these political parties weren't simply two sides of the same coin?

Abe and his cronies claim that the Olympics will charge Japan's infrastructure investment and help the economy. That's bullsh*t folks. Don't forget, that Japan ran up this 245% debt to GDP all through the 80s, 90s, 2000s with wasteful infrastructure investment. How is having an event going to change the equation?

Testosterone Pit writes in Tokyo Olympics "Boom" and "Bubble":

These words are already cropping up when discussing real estate developments in the Harumi area, reclaimed land by the Tokyo Bay where the Olympic village will be sandwiched between the two main competition sites. Two dozen high-rises are to be built (though high-rises on reclaimed land did badly during the earthquake in 2011 as the ground “liquefied”) with nearly 11,000 luxury apartments. There will be dining halls, seaside restaurants, and parks. And views of the Rainbow Bridge to Odaiba, a manmade island with hotels and apartment buildings, but not much else. 

All this activity, including new transportation, will jack up apartment prices by 20%, Sanyu Appraisal Corp. announced giddily. This bubble excitement comes on top of the bubble the BOJ’s free trillions are already creating in the Tokyo property market. It would “particularly benefit land owners” in Tokyo Waterfront City, predicted a report published by Macquarie Securities to further stir up bubble enthusiasm. Nomura Securities jumped into the fray with its own prediction that it would “attract a new wave of investors to housing in the bay area” that would “push up property prices.” Alas, if wages remain stuck where they are, and if inflation cuts real wages further, who is going to buy these beauties? The few beneficiaries of Abenomics and foreign investors? 

Yeah, let's build lots of building and sky rises... Just like the late 80s when these things were built in Makuhari. Been there recently? I went there, just last month... These beautiful office buildings and high rises still stand empty... At 50% (or less) occupancy. Huge money losers...

And most Japanese people cheer the 2020 Tokyo Olympics? Incredible. If they are happy now, then I guess they'll all be having orgasms when their sales tax goes to 10%.... Any bets for 15% (or more) by 2025?

The Abe government gets their wish: A smoke screen to cover for more spending. The people cheer on...

"Panem et circenses" (bread and circuses) - 大衆の不満をまぎらわすために提供される)食事と娯楽. − Juvenal

No problem about the debt, though... Our kids can pay for it.


NOTES ON FUKUSHIMA: Never mind yesterday's news (Sept 13, 2013) that completely contradicts what Shinzo Abe said to the Olympic committee. From Japan Times:

A senior official of Tokyo Electric Power Co. admitted during a meeting with opposition lawmakers on Friday that the massive radioactive water buildup at the crippled Fukushima Daiichi nuclear power plant is "not under control." ... that view directly contradicts Prime Minister Shinzo Abe's statement last week to the International Olympic Committee in pushing Tokyo's bid to host the 2020 Summer Olympics.

I said not to mention Fukushima... Well, I lied.... Just like Shinzo Abe. And I don't really think that the radiation from the leaks are all that much of a problem, as opposed to what the media is reporting. But that's the kicker here, isn't it? The media reports one thing and the Japanese government and TEPCO say another.... Will world governments and athlete's believe their media or what the Japanese government says?

I don't think what Abe or TEPCO says have much credibility left. 

Do you?

Here's what Der Spiegal thinks in Germany:

Thanks to my friend Mark Davis for the Thoreau quote.

Monday, September 9, 2013

After Thoughts on Tokyo Being Awarded the 2020 Olympics - Will Tokyo 2020 Lose Money?... What Do You Think?

In yesterday's post entitled, Tokyo Gets the 2020 Olympics... Unfortunately... I wrote about how I was unhappy about the Olympics coming to Tokyo as I have good reason to believe that the Japanese government will spend taxpayer monies on construction projects for the Olympics and, after it is all over, the average Japanese tax payer will be saddled with billions of dollars of debts. 

Guys like Al Hitler or North Korea's Dim Son like the Olympics, they get a chance to show their public how great they are! Read about the wisdom on India concerning the Olympics here.

I think historical precedent of the Olympics themselves and the track record of the Japanese government with debt at 245% of GDP are pretty strong evidence to support my fears....

I wrote in that post:

"Oh, but the Olympics will be good for the economy!" Oh really? Tell another country that is deeply into corruption and kickbacks, Greece, about that one. This from the Daily Beast:

"Indeed, the $12 billion cost of hosting the Games contributed to the Greek economic collapse and left an abandoned Olympic Park, which has been overrun by weeds and graffiti artists."   

Yeah, but that's Greece. Japan is different, right? 

Nope. Japan should have learned her lesson a short 16 years ago. Please refer to Yahoo: Olympic Cities Booms and Busts?

Nagano, Japan (Winter 1998) Boom or Bust? Bust 

The full cost of the Nagano Winter Olympics will never be known as the documents accounting for money spent on the Olympic bid were burnt on the orders of the Olympic Committee vice-secretary general, Sumikazu Yamaguchi. (Emphasis mine) Yet it is clear that it went vastly over budget, with new infrastructure to make the Games work in this small Japanese city costing up to A$9.4 billion. As a result, Nagano fell into recession, with the debt on Olympic projects roughly A$28,000 per family and growing. It is estimated that these debts will take until 2015 to pay off. 

The Olympic venues alone cost A$20.6 million per year in upkeep, and their rental income brings only one-tenth of that amount. Although Nagano is working hard to stop the Olympic venues turning into rotting white elephants, the cost of their upkeep is not easy for the city's finances. Today it still costs A$2.3 million a year alone to maintain the M-Wave, where local school children take skating lessons on a high-speed 400-metre rink in winter. The installation of a high-speed bullet train during the Olympics also posed problems for the local hotel industry as more skiers came on day trips rather than spending the night and locals are more inclined to go on shopping days to larger cities. 

It is estimated that the last Olympics in Japan in Nagano in 1998 lost $10 billion USD. Read the rest of Tokyo Gets the 2020 Olympics... Unfortunately... here. 

After I wrote that article, I received calls and emails from people who argued with me and others who were totally supportive. So I decided to do even more research on the subject asking myself the question; "Is it really possible to make a profit on the Olympics?"

Well, before I give you my useless two cents, here's some interesting information I found. Did you know that only two Summer Olympic games were profitable since 1932? Yep. Two. They were Los Angeles in 1984 and Atlanta in 1996.

How did they do it? Well, I want you to keep in mind that both of these Olympics happened in the USA. These events happening in the USA is critical information and the reason for that will become more apparent later... 

But, for now, let's look at the first one; Los Angeles 1984:

From Wikipedia:

"Where ambitious construction for the 1976 games in Montreal and 1980 games in Moscow had saddled organizers with expenses greatly in excess of revenues, Los Angeles strictly controlled expenses by using existing facilities except a swim stadium and a velodrome that were paid for by corporate sponsors…. The 1984 Summer Olympics are often considered the most financially successful modern Olympics."

Also from All About History:

"...the 1984 Olympic Games saw, for the first time ever, corporate sponsors for the Games. In this first year, the Games had 43 companies who were licensed to sell "official" Olympic products. Allowing corporate sponsors caused the 1984 Olympic Games to be the first Games to turn a profit ($225 million) since 1932."

OK. Let's check that. The 1984 Olympic Games were profitable because of two things:

1) Use of existing facilities
2) Corporate sponsors

Now, let's look at the only other profitable Summer Olympics since 1932 (I don't really want to go into Winter Olympics because, actually, comparing, for example, Nagano 1998 with a Summer Olympics Game is unfair); the Winter Olympics are an extremely risky business as they are not nearly as popular with audiences as the Summer Games are. But let me use one example (again an Olympics in the USA):

From Yahoo:

"The Salt Lake City Winter Olympics was one of the most expensive of all time, coming close to the cost of hosting the summer Games, at A$1.8 billion (including A$470 million for security). However Organizers claimed a A$94 million profit as a result of lucrative television deals."

OK. Now we can see the third factor that builds a profitable Olympics: 

3) Television deals and the advertising that goes along with them.

So it is possible to make money from the Olympics. 

But, looking at this from a broadcaster in Japan perspective, I can now tell why, after researching these and dozens of other articles, I am even more convinced that the Tokyo 2020 games will lose money and become a massive tax burden on the Japanese economy. 

First let's compare apples to apples: Let's examine why the 1984 Olympic Games were profitable. They were profitable because of two things. First, as stated above, 1) Use of existing facilities

Well, Japan has already announced that they aren't going to do that. Please refer to: Tokyo’s winning 2020 Olympics bid will only worsen Japan’s debt headache:

"...The cost of Tokyo’s bid fell between $5 billion and $6 billion. That includes the construction of 11 new sporting venues and 10 temporary ones, at a cost of $3 billion. The Olympic village will cost another $1 billion, according to the IOC.

The Tokyo government projects that the Games will generate $30 billion in economic benefits for Japan—and that, it said, is a conservative estimate since it calculates only direct spending on the Olympics. One of the notions is that it will boost domestic consumption, helping wrest the country from a couple decades of debilitating deflation. 

So Tokyo’s victory basically is license for the Japanese government to spend like crazy on infrastructure. You can see why Shinzo Abe, Japan’s prime minister, put himself on the line to win the bid. An Olympics building bonanza is basically the second pillar of Abenomics—fiscal stimulus (the first is monetary policy; the third is structural reform)—on steroids...."

So, when speaking of out of control government spending, well, who can do that like the Japanese? Especially the current government. This does not bode well.

Now, let's look at the second factor of the Los Angeles Olympics that helped profitability:

2) Corporate sponsors

This is a mixed bag here. On the one hand, I can't really see Japan having too much trouble with Corporate sponsorships... Excepting two tiny little problems: Japan's economy is already a wreck and the on-going problems with Fukushima (bad advertising)...

Now that brings me to the final point that convinces me beyond the shadow of doubt that the Tokyo Olympics will lose money: 

3) Television deals and the advertising that goes along with them.

I now speak from experience and it is so obvious that I wonder why no one can see this... The biggest problem with Japan getting major TV contracts from the USA and the west? The same as it was during the Nagano Olympics and the 2002 World Cup (which lost Japan a few 10s of millions too).

"The games in Japan -- which co-hosted with neighboring South Korea in 2002 -- continue to be an economic drag on the local communities. Why? Maintenance of the stadiums built for the games costs more than the revenues they bring in. 

Eight of the 10 stadiums built or renovated in Japan for the 2002 World Cup lose between $2 million and $6 million a year, the balance of which is picked up by Japanese taxpayers. "No strategy, no success," said Ichiro Hirose, a member of the 2002 World Cup Bidding Committee in Japan. "They did not have a strategy" for use of the stadiums after the games, he said."

"The 1994 games in the U.S. generated a $60 million surplus from ticket sales, sponsorships and licensing agreements, said Alan Rothenberg, chairman and CEO of the 1994 World Cup. Since the tournament used existing stadiums, there wasn't a significant infrastructure legacy from it..."

But I digress. 

Here's a very simple reason why Television contracts will be sorely lacking for the Tokyo 2020 Olympics and that will impact corporate sponsorships, and there's not a thing Tokyo can do about it; the Internet and Time Zones.

That's right. Think about it, if you are some person who loves sports but live in massive TV markets like New York or Los Angeles, are you interested in waking up at 3 or 4 am to watch a live sports event from Japan?

I doubt that the average American will do so. And since the average person won't, then I suspect that major US (and European) stations might balk at paying high prices for rights to broadcast live when the audiences are all sleeping? And there's little reason to buy rebroadcast rights as the Internet will already tell everyone the result and, as everyone knows, if the sports aren't live, then what's the point?

Also, for all its warts, the USA is still, by far, the biggest economy in the world. Let's not forget that in our calculations. 

I think I've heard of this problem with TV happening before (I work in broadcasting!) It happened with the Olympics in Beijing; it happened in Nagano; it happened with the 2002 World Cup in Korea - Japan and, because there's no way to change the time zones, it's going to happen in Tokyo 2020.

And when TV doesn't broadcast these games live to an awake audience (the average viewer) then big sponsors aren't interested. 

When things like this happen, I think it makes people leery. Please refer to: NBC reports financial loss after Beijing Olympics, claims profit is on the way:

NBC, one of the largest American television networks, held the exclusive right to host the 2008 Summer Olympics Games coverage for the US. Despite generating over $1 billion in revenue from the Olympic coverage, NBC has reported a loss of undisclosed size in its third quarter. The network is still hopeful to come out with a profit at the end of the year, and claims its third quarter loss stems from the way Olympic revenues and expenses are booked by accountants. 

My guess is that the availability of free online Olympic content played a significant role in contributing to NBC's financial loss. 

So the question arises, will major TV networks keep investing a lot of money into Olympic coverage and compete with YouTube (and other popular participatory sites), when their Olympic profit margins are getting so thin or even negative? 

I bet "No!"

So, let's tally:

The three factors that made profitable Summer Olympics since 1984 were:

1) Use of existing facilities
2) Corporate sponsors
3) Television deals and the advertising that goes along with them.

*Japan has already announced massive new spending on new facilities 
*Corporate Sponsors? We're probably OK there... Just "OK."
*We are in bad shape in this area because of time zones and the Internet.

I don't see this turning out too well. I predict a hugely successful 2020 Tokyo Olympics... 

I also expect a massive hangover and a huge tax bill leftover to pay for it too. 

What do you think?

More? Read this: The Curse of the Olympics 

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