tag:blogger.com,1999:blog-18306571470219714162024-03-13T12:43:48.236-07:00Buying Property in Japan, Foreclosed Japan Real Estate, Philippine Real Estate, NZ propertyBuying Property in Japan, Foreclosed Japan Real Estate, Philippine Real Estate, NZ PropertyAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.comBlogger225125tag:blogger.com,1999:blog-1830657147021971416.post-55768745277717041262016-10-07T02:12:00.001-07:002016-10-08T19:31:51.350-07:00The Appeal of Japan<div dir="ltr">
There are several different motives for living in Japan:<br />
1. <b>Working opportunities</b> for foreigners are restricted to certain areas like technical specialist roles, finance, academic, programming and English instruction. Japanese fluency and cultural sensitivity are otherwise major stumbling blocks. <br />
2. <b>Liveability</b>. Japan offers a very desirable living environment with modern services, conveniences and cultural engage. This is the benefit of a big city and it appeals to Asian and western skilled immigrants alike. The issue is arguably the entrenchment of Japanese "polite culture". You might wonder: "Who would object to politeness?" Any outsider who arises at the conclusion that politeness equates to engaging in 'cultural rhetoric', and otherwise appealing for 'outsider consideration' by diminishing your own ego whilst venerating Japanese culture. Whilst you can spurn Japanese values, the exposure to 'difference' has its own rewards, and one can celebrate how the Japanese live. The Japanese are in effect living how we all will be living 30 years from now. I frankly wish everyone was further progressed. This says nothing of Japanese values but simply their "bureaucratic organisation". </div>
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3. <b>Seasonal:</b> The country offers a departure from Southern hemisphere seasonal weather. Not that the southern hemisphere needs a respite given its relatively mild winters. <br />
4. <b>Safety: </b>Japan remains a very safe place to live and hold property. <br />
5. <b>Investment</b>: The Japanese economy is often considered a "basket case". The reality however is that it is priced accordingly. Property prices outside of city centres has been kept low by falling real wages and housing oversupply. Japanese don't so much 'sell houses' as buy anew: whether next door or in the city. If there is any vulnerability it is in the prospect of higher taxes as taxes on land, particularly low - end property, are relatively modest. Low end property owners can pay as little as $150-250 a year in rates, depending on the age and size of their house and land, as well as its location. The other benefit of property is that it's a real 'hard asset', and since not overpriced, Japanese property is not vulnerable to currency debasement concerns. You might however want to consider vulnerability to major earthquakes when buying. Here again, Japan benefits from an oversupply of property and modern design and engineering standards. This has become a national imperative. <br />
6. <b>Expat friendly</b>. Being a big country you might have expected Japan to be "unliveable", but fortunately many Japanese speak some English, most things are automated (even ordering food), and there is a great deal of English signage and many 'work-arounds'. You can find great places to drink and eat when you can meet with people all around the world. <br />
7. <b>Cost of living and business</b>: The requirements for a business visa are quite onerous, and whilst income taxes are fairly high, operating costs are low. The same for the cost of living. The sustainability of the old fashioned corner store is a testament to the low cost of business in Japan. The obstacle is not financial, but rather cultural. This is why most foreigners target foreigners for business. <br />
8. <b>Technology</b>. Japan has lost its technological lead however it remains a substantive player and is strong on technological adoption, making it a great place to buy toys like this display model at the Nissan Show Room in Ginza, central Tokyo. <br />
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Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0Ginza, Chuo, Tokyo 104-0061, Japan35.6721142 139.7708253000000735.6592147 139.75065530000006 35.685013700000006 139.79099530000008tag:blogger.com,1999:blog-1830657147021971416.post-54314538173151379402016-10-04T20:42:00.001-07:002016-10-07T02:08:19.889-07:00Buying a new house in Japan<p dir="ltr">There are other options other than buying a foreclosed property. These options include:<br>
1. Buying a used home on the market <br>
2. Building a new home - whether a mansion, condo, or a stand-alone townhouse in the inner or outer suburbs of Tokyo  (or other major city).</p>
<p dir="ltr">One option of buying a new home from a developer. I was out walking in the Adachi district of northern Tokyo the other day, reflecting on the appeal of this type of the proverbial stand-alone  home. </p>
<p dir="ltr">It is fair to say that these villas might be construed as making sense for some people:<br>
1. More storage than a strata property, both for cars, toys, other possessions. <br>
2. Proximity to schools, nurseries and parks by virtue of the space for these facilities in the district. I.e. Proximity to a river flood plain makes particular sense given the sterilization of this land by flood restrictions for anything but flood mitigation and open spaces and sporting facilities. <br>
3. Perception that wooden houses are safer structures than strata high rise structures.  This is a question that depends on your comfort with modern engineering in the midst of earthquake events, and how that exposure might play out in terms of sustained asset prices. I would suggest that engineering standards have closed the gap. The question is whether the developer can be trusted to not take any short cuts. <br>
4. More freedom for kids to roam, ride their bikes, and play safe. Perhaps there is  more tolerance of noisy kids if this is the targeted market for the subdivision. </p>
<p dir="ltr">Of course such subdivisions have their disadvantages:<br>
1. What is the point of paying for land value if there is no surplus land for you to develop? <br>
2. What is the likelihood of your vertical strata space having value in future given the ubiquitous availability of it? There is one reason for hope, and that is a good location strategy that results in your community benefiting from a new rail line.  <br>
3. Isolation from the conveniences of the city, or even a regional city. There are of course levels of convenience. Can you ride home from the station? Will you otherwise have to pay for kids and family to travel concurrently to the city. In such cases, you are better off living near a regional city in a "modern" mansion, knowing the lifespan of older mansions is diminished by lower engineering standards. <br>
4. The depreciation rate on new houses is very high. Marketing costs and manipulative sales strategies can see buyers pay too much compared to existing homes.  It's not necessarily that home developers are ripping off the customer, but that the costs of a new building are high, and many non-discerning buyers are prepared to make emotional or haphazard "trusting" decisions upon the urging of sales driven companies. </p>
<p dir="ltr">You can buy a modern villa of 100m2 in land area and house floor area contained in a compact 2-storey house for around Yeq 390-420,000. These are very constructed homes with a lot of space. Not so comfortable given the smallness of rooms. </p>
<p dir="ltr">One of the reasons you might welcome a villa is foe the sun and breezes, but consider your window sizes and fly screen options. Consider that your neighbor's house might be as close as 0.5m away, reducing air flow and light to lower floor. Do you want any garden?</p>
<p dir="ltr">The problem with buying new is that the fresh paint smell doesn't last.  The value of a new home will fall rapidly on purchase over the first 5 years. You might also suffer the result of poor neighbour's if their practices are evident. i.e. If they are untidy. </p>
<p dir="ltr">There are other important considerations though:<br>
1. Are you buying on a good train line with respect to entertainment and shopping centres <br>
2. Are personal connections served? You would hope to live there for 15 years if you are going to buy new, otherwise those early depreciation rates are going to be costly. Renting such a place is going to be costly in terms of depreciation too. Be sure to lock in a long term customer to fully realise that "new home" premium. <br>
3. Is there scope for new train lines? A geospatial gap to fill? This creates upside for more lines and competition, which improve connections and stimulate population growth and development of services. Development is not equal. We need to make decisions that improve our odds of success. <br>
4. Are the prices for rail reasonable? I bought on the Seibu Ikebukuro line because it's cheap. Some lines however are very expensive, like the Nippori Toneri Line. The price is a reflection of capital costs, competition, line length and the incomes of the market catchment. </p>
<p dir="ltr">There are two types of unwary people that buy villas:<br>
1. Young families buying their first home <br>
2. Older couples who are looking for a retirement home close to their children & families, or plausibly a better house on their local community. Often it's a preference to remain in their home town. </p>
<div class="separator" style="clear: both; text-align: center;"> <a href="https://lh3.googleusercontent.com/-mbmBsyyvYo4/V_dlKigEKBI/AAAAAAAAG8w/cWJ2lExDQc4/s1600/20161004_130748.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"> <img border="0" src="https://lh3.googleusercontent.com/-mbmBsyyvYo4/V_dlKigEKBI/AAAAAAAAG8w/cWJ2lExDQc4/s640/20161004_130748.jpg"> </a> </div><div class="separator" style="clear: both; text-align: center;"> <a href="https://lh3.googleusercontent.com/-sVlhvb1V35k/V_dl7w5IIbI/AAAAAAAAG84/wSO-qw6Oxv4/s1600/20161004_130922.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"> <img border="0" src="https://lh3.googleusercontent.com/-sVlhvb1V35k/V_dl7w5IIbI/AAAAAAAAG84/wSO-qw6Oxv4/s640/20161004_130922.jpg"> </a> </div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-42047202211693786312016-06-16T02:11:00.000-07:002016-06-16T02:11:09.104-07:00Bike touring in Japan<div style="text-align: justify;">
One of the best reasons to buy foreclosed property Japan is to take advantage of the fabulous infrastructure for domestic travel. We all hate paying too much, and in Japan, people have paid too much for 'over-capitalised' infrastructure that borders on the insane. i.e. Looping bridges and highways that parallel the coast on pontoons. Great facilities, roads and pathways, which are a boon for bike tourers.<br />
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Here is a set of resources for bikers thinking about travelling around Japan, provided by a person who has done it. I am personally more interested in the opportunities for whitewater kayaking, and I spent a lot of time touring around on a Japan Rail Pass checking out the various rivers that run along a litany of Japanese river valleys.<br />
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<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
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<br />Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-61565846944299838622016-03-16T16:43:00.000-07:002016-03-16T16:51:12.154-07:00TPPA to rejuvenate Japanese agriculture in short term<div style="text-align: justify;">
One of the interesting aspects about Japan is the irony of the place. I say this for a number of reasons, among them:<br />
<br />
<ol>
<li>A nation that pays its farmers not to plant crops</li>
<li>A nation, long famed for the most expensive real estate in the world, that perplexingly has the cheapest property, in the most convenient locations that Westerners could imagine</li>
<li>A proud nation lacking in constituents with self esteem</li>
<li>A considerate nation lacking in empathy for others</li>
</ol>
<div>
On this note, I draw attention to another prospective opportunity for adventurers that might gain traction, if only because it is 'counter-cyclical'. Japan is one of a number of Asian Pacific nations that is reforming its trade laws. Japan has long been open to trade reforms, however the nation has oft resisted these changes because:</div>
<div>
<ul>
<li>Change was considered electoral suicide in Japan - particularly the topic of farm support</li>
<li>Food security was considered a key consideration</li>
</ul>
<div>
Today, priorities seem to have shifted, and so there is good reason to believe that Japan might in fact support agricultural and trade reform. The reasons to suspect this are:</div>
</div>
<div>
<ul>
<li>The prospect of importing cheap food from abroad</li>
<li>The high cost of living in Japan due to high food costs, and its corresponding impact on low income families, who are growing in number</li>
<li>The declining importance of farming due to the aging population</li>
<li>The appeal of opening up trade opportunities for Japanese industry, even if that means corresponding closure to a long history of mercantilism on agriculture</li>
<li>The spiraling Japanese public debt, and thus the corresponding need for Japan to end its subsidies on agriculture</li>
</ul>
<div>
We might then wonder whether Japan is seeing the writing on the wall, and thus dropping its previously mercantilist strategy, for what might be construed as a far more enlightened and fairer posture to all concerned. Paradoxically, it appears this strategy is having the opposite affect. The Japanese government has increased support for Japanese farmers to stop rice farming. i.e. This funding could be construed as:</div>
</div>
<div>
<ol>
<li>A payoff to ease the burden on farmers entering retirement, i.e. The bulk of Japanese farmers are over 65yo, working small land plots compared to their competitors, with modest farm equipment.</li>
<li>A capital incentive for Japanese farmers, where they remain committed and their farmlands prove suitable, to opt for a different type of agricultural product, that is more sustainable in a post-reform era.</li>
</ol>
<div>
The implication is clear. There will be several changes in the post-reform period:</div>
</div>
<div>
<ol>
<li><b>More commercial acumen</b> as committed younger farmers and corporate farmers have positive incentives to shift to more marketable, higher margin crops. Clearly in the past, the guarantees of farm support only gave Japanese older farmers the incentive to persist in what they were doing, so they just became more 'entrenched' in protectionism. </li>
<li><b>Higher economies of scale</b> in the new era. There will need to be a great deal of consolidation of existing farms. Most likely we might expect farmers, not to sell their land, but instead to lease lands for a modest retirement 'farmland' income. </li>
<li><b>Greater land availability</b>. It is inevitable that some of this land will become available to 'new farmers'. The question is whether it will be quality land, and whether the 'shards of land' offered will be desirable in the new era. After all, corporate farmers will want to consolidate their interests, and not have their interests scattered across the country. There is every reason to think that they are already identifying the farms with the greatest appeal in terms of access to markets, fertility, and centrality to their existing interests. Notwithstanding the appeal of 'proximate land', the corporate farmer has a trump card up his sleeve. Japanese agricultural land is zoned for agriculture, so corporate farmers will know that, even in 'growth areas' close to cities, there will be land that retiring farmers will have no choice but to accept a 'low-price' deal in order to secure use of land. </li>
</ol>
<div>
The opportunity of course to buy farm land in Japan is not restricted to Japanese nationals, however there is a need for any investor to pay membership dues to the Japan Agriculture Association (JA). The appeal of farming in Japan is strong for a number of reasons:</div>
</div>
<div>
<ol>
<li>Low yield, low margin rice farming lands are going to give way to higher yielding, higher margin crop selection</li>
<li>Asian crop competitiveness is destined to fall as farms in Asia's emerging markets prefer to work in factories rather than on farms. This of course will take time. </li>
<li>Higher farm equipment utilization rates can be expected to cut farming costs. Historically farmers in Japan, whilst cooperative, have not been particularly engaging when in came to sharing farm equipment. This, and the smaller plot sizes, resulted in small scale farm machinery, which is an approach mirrored in Asia, and otherwise a boon for Japanese farm equipment manufacturers.</li>
</ol>
</div>
<br />
The other appealing factor is the possibility of buying cheap and moribund 'scrap' infrastructure at auction. A great number of Japanese farmers have gone broke, and retain shards of Japanese farm lands and infrastructure as a result of poor business and lifestyle decisions. Some have become alcoholics. In any case, a substantial number of properties have ended up in the courts as foreclosed properties. Given the prevailing attitudes to farming in Japan, this does offer a counter-cyclical opportunity for others. Consider that:<br />
<br />
<ol>
<li>Japan is reforming the sector</li>
<li>Japan's hinterland has amongst the best rural infrastructure in the world, with great connectivity to the main Japanese cities, i.e. Rarely is an isolated rural hinterland more than 90 minutes train from a major city, or three hours from a mega-tropolis like Tokyo, Osaka, Fukuoka, or arguably not Sapporo (Hokkaido). Yes Sapporo is substantial centre, but the cold north is not well suited to agriculture anyway, given the cold climate, or short seasons. </li>
</ol>
<br />
If you are more interested in Japan's farm sector, and the opportunities to buy farm land in Japan, consider our <b><a href="http://andrewsheldon.info/shop/investments/japan-foreclosed-property-2015/">Japan Foreclosed Property</a> guide</b>. Most of the buyers are 'small scale' Westerner farmers married to Japanese spouses, however there is scope for those with greater capital resources to seek a business visa for the purpose of pursuing a farming business. This obviously requires vetting by the Ministry of Foreign Affairs of your business proposal.<br />
<br />
The strategic opportunity in Japan could be considered to lie in the future of Japan. Consider that Japan is struggling to kick-start its economy. There is every reason to think that objections to immigration will be swept away by economic imperatives, and that more Indians, Chinese, Filipinos and Koreans, will mean the introduction of more restaurants with 'peculiar' or exotic food supply needs, and the expectation that this produce will be supplied locally in Japan. This is therefore an opportunity to anticipate if one sees Japan moving in the same direction as other Western countries.<br />
It seems however that it is the Trans-Pacific Partnership Agreement (TPPA) that is to kickstart Japanese agriculture. It is probable that the opportunities to buy foreclosed Japanese rural property will be in this early stage, and that latter-day entrants will be left to fight over infertile, remote land in the 'full priced' private property market.<br />
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<br />
<b>Asian property markets </b> <a href="http://andrewsheldon.info/shop/investments/japan-foreclosed-property-2015/">Japan Foreclosed Property Guide</a> <b><a href="http://sheldonthinks.ecrater.com/p/2660019/buying-philippines-property-2-volume-ebook">Philippines Property Guide</a></b><br />
<b>Profit from mining with</b> <a href="http://miningstocks.sheldonthinks.com/">Global Mining Investing eBook</a></div>
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<div style="text-align: justify;">
<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://2.bp.blogspot.com/-wgcGkuKsbZQ/VunxR8kikCI/AAAAAAAAKlo/-yl-Tb37mfIwwRzjyVzK70ADIo8emEOYA/s1600/sukomo-105666_960_720.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="480" src="https://2.bp.blogspot.com/-wgcGkuKsbZQ/VunxR8kikCI/AAAAAAAAKlo/-yl-Tb37mfIwwRzjyVzK70ADIo8emEOYA/s640/sukomo-105666_960_720.jpg" width="640" /></a></div>
<br />Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-63167423041165944082015-08-18T01:25:00.001-07:002015-08-18T01:25:19.711-07:00Political opportunities squandered in Japan - until now<div style="text-align: justify;">
<div class="MsoNormal">
Japan has over the last decade struggled to kick-start its
economy, though the current round of Abenomics is certainly the most persuasive reform effort yet. On the last attempt Japan fell back into a "triple-dip" recession (recording two quarters of negative GDP growth) in 2014,<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[i]</span></span><!--[endif]--></span> after the GST increase to 8%. The economy did return to growth by the end
of the year (with GDP expanding 1.5% in the March 2014 qtr),<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[ii] however the growth </span></span></span>was far below expectations given the stimulus supporting the program. There was simply no reason to expect stronger household
spending as long as wages stagnate. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There has been a long-standing opportunity for Japan to
reform. The task would have been far easier if the nation had taken such
measures whilst the global economy was ‘humming’, but such opportunities were
squandered due to:</div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -18pt;">Controversial corruption allegations (with
respect to political donations) against a raft of PMs, political leaders and Diet
members</span><span class="MsoEndnoteReference" style="text-indent: -18pt;"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[iii]</span></span></span></li>
<li><span style="text-indent: -18pt;">Reticence on the part of Diet members to expose
their constituents to reform</span></li>
<li><span style="text-indent: -18pt;">Historically an absence for a policy imperative outside of the
bureaucracy</span></li>
</ul>
<div class="MsoNormal">
Abe was able to resurrect a party coalition with a substantial
parliamentary majority, but was not able to achieve any concrete progress with
structural reform, which led to his electoral demise in his first term. It was
only the ineptitude of the DPJ and his resounding win in the December 2014
election<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[iv]</span></span><!--[endif]--></span>
that seems to have allowed him to mature as a political leader, giving him the
time to challenge entrenched interests. <o:p></o:p></div>
<h4>
Latest efforts to invigorate Japan<o:p></o:p></h4>
<div class="MsoNormal">
Poor economic data in this latest <b>July</b>-2015 quarter has given market analysts reason to
expect more stimulus from the Bank of Japan. Paradoxically, Japanese stocks rose on the announcement, which goes to show that investors
are favorably disposed to any effort that supports asset prices, whether ‘real’ or
‘illusionary’. It does not matter if there is confidence in the reform process or not, as long a there is concurrent stimulus. Expectations for BoJ stimulus might prove wrong if instead it
is the Fed that pursues stimulus. That is to say, there is a
good reason to expect a concurrent Fed program to:</div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -18pt;">Raise interest rates by 25bp in Sept-2015</span></li>
<li><span style="text-indent: -18pt;">Quantitative easing in order to stimulate the US
market</span></li>
</ul>
<div class="MsoNormal">
One might ask whether the US market actually needs such
stimulus given that US employment is supposedly on the rise, and new vehicle
sales are at record levels. There is other evidence however to suggest that not
all is well in the US economy, namely:</div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -18pt;">US inventory levels - see the ominous signs of recession below</span></li>
<li><span style="text-indent: -18pt;">Stock and bond prices - note the tendency for stock indices to fall every 7 years (2001, 2008 and now 2015??)</span></li>
<li><span style="text-indent: -18pt;">Workforce participation - trending down for a long time</span></li>
</ul>
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<a href="http://3.bp.blogspot.com/-wU0u_kdh7F4/VdLdonZWSwI/AAAAAAAAGos/4CpTDeUpknY/s1600/US%2BBiz%2Binventories-11Aug15.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="380" src="http://3.bp.blogspot.com/-wU0u_kdh7F4/VdLdonZWSwI/AAAAAAAAGos/4CpTDeUpknY/s640/US%2BBiz%2Binventories-11Aug15.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="text-align: left;">Source: <a href="http://www.tradingview.com/">Trading View</a> & <a href="https://research.stlouisfed.org/fred2/series/BUSINV/">Federal Reserve</a>; trend analysis by Andrew Sheldon</span><br />
<span style="text-align: left;"><br /></span>
<br />
<div style="text-align: left;">
Japan's benchmark Nikkei-225 index rose 0.6% to 20,637pts in
response to the poor data.<span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[v]</span></span></span>
It is possible the Japanese government will resort to more stimulus in the belief that the corporate sector is in the process of boosting investment, as well as an expected ‘flow-on’ effect from lower commodity prices, as well as reduced coal and oil imports, thanks to the recommencement of nuclear energy production by the Japanese utilities, however the contribution is relatively minor.</div>
<br />
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There is every reason to believe however that any attempt to
stimulate the US and Japanese economies will achieve nothing, and that both
economies are destined to fall into recession, due to lax activity in the ‘real
economy’. There can be expected to be concurrent weakness in asset market. <o:p></o:p></div>
<div class="MsoNormal">
A muted economy is of course not terribly problematic for
governments when you consider that they can have confidence in:</div>
<div class="MsoNormal">
</div>
<ul>
<li><b style="text-indent: -18pt;">Their
control of the process</b><span style="text-indent: -18pt;"> – with their limited majoritive mandate</span></li>
<li><b style="text-indent: -18pt;">Moral and
political relativism</b><span style="text-indent: -18pt;"> – constituents have little choice – and Japan is not singularly a ‘weak economy’. There is also a global disdain for government.</span></li>
<li><b style="text-indent: -18pt;">Media
support</b><span style="text-indent: -18pt;"> – the media and public are reticent to trust political opponents. Globally there seems to be a campaign of destabilisation by the media.</span></li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l2 level1 lfo3; text-indent: -18.0pt;">
<o:p></o:p></div>
<h4>
Evidence of slowing economy<o:p></o:p></h4>
<div class="MsoNormal">
The problem for Japan is that:</div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -18pt;">Without
substantive reform, no one will have any confidence in the sustainability in
the economic outlook</span></li>
<li><span style="text-indent: -18pt;">Without
any expectation of a stronger global economy, more ‘currency competitiveness’
will do little to ignite export industries, since its competitors will simply resort to the same measures.</span></li>
<li><span style="text-indent: -18pt;">Without
the tangible prospect of more jobs and higher incomes, the prospect of higher
prices will just result in a decline in real wages.</span></li>
</ul>
<div class="MsoNormal">
This is precisely
what we are seeing, with the results for the June quarter alluding to:</div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -18pt;">A
slowing in economic activity – with a contraction in </span><span style="text-indent: -18pt;">household spending
and business investment resulting in an annualized 1.6% decline in GDP in the
Mar-2015 quarter.</span><span class="MsoEndnoteReference" style="text-indent: -18pt;"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[vi]</span></span></span></li>
<li><span style="text-indent: -18pt;">Household real incomes falling in the wake of
the GST hike, as the cost of living rises.</span></li>
</ul>
<div class="MsoNormal">
There are hopes
within the government and BOJ that growth will eventually prevail. Economists
are forecasting a modest 2% annualised GDP for the Sept-2015 quarter.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[vii]</span></span><!--[endif]--></span><o:p></o:p></div>
<h4>
Japan is not all bad news<o:p></o:p></h4>
<div class="MsoNormal">
It is not all bad news for Japan. Consider that:</div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -18pt;">Japan ran a current account surplus of ¥8.18
trillion for the 6 months to June 2015, the highest since late 2010.</span><span class="MsoEndnoteReference" style="text-indent: -18pt;"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[viii]</span></span></span></li>
<li><span style="text-indent: -18pt;">Japan is a big beneficiary of lower crude oil
prices, significantly reducing its trade imports</span></li>
<li><span style="text-indent: -18pt;">Japan is also destined to benefit from a
substantial reduction in oil, natural gas (i.e. LNG) and coal imports as
nuclear power generation is resumed from nuclear plants mothballed in the wake
of the Tohoku tsunami disaster</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; text-indent: -18pt;"> </span><span style="text-indent: -18pt;">The weak Yen is destined to stimulate growth in
national income as Japanese exports become increasingly competitive. The yen
has fallen 50% against the USD since the end of 2012.</span><span class="MsoEndnoteReference" style="text-indent: -18pt;"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[ix]</span></span></span></li>
<li><span style="text-indent: -18pt;">The Japanese property market is relatively
‘cheaply priced’ outside of the central business district</span></li>
<li><span style="text-indent: -18pt;">Japan retains a ‘trump card’ insofar as it is
able to boost immigration to ‘grow its economy’, in the process increasing
demand, serving as well to reduce the burden upon taxpayers in per capita terms.</span></li>
<li><span style="text-indent: -18pt;">Asset prices are bouyant, as is the case
elsewhere in the globe. The Nikkei index has steadily risen to an 8-year
high during 2015.</span><span class="MsoEndnoteReference" style="text-indent: -18pt;"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[x]</span></span></span></li>
</ul>
<div class="MsoNormal">
Japan’s trade statistics are trending in the right
direction, with the trade deficit falling to ¥422 billion (down from ¥6.2
trillion in the previous year) on the back of a 5.9% increase in exports and
8.8% increase in imports. Japan also benefits from stronger remittances of
investment income as the Yen weakens, up 26.1% to ¥10.51 trillion.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xi]</span></span><!--[endif]--></span><o:p></o:p></div>
<div class="MsoNormal">
The stronger trade balance is largely the result of stronger
sales of automobiles and electronic parts, and yet these muted sales are largely the result of the weaker
yen rather than stronger export markets. The concern of course is that Japan’s QE program is destined to see other
competing nations simply resort to the same policy, rather than engaging in any
steps to reform the economy, or the devaluation of their currency in the same vain. This has prompted some economists to expect a 'currency war', which will inevitably serve no one, but simply to undermine confidence in the political actors.<br />
<br />
<o:p></o:p></div>
<div class="MsoNormal">
Another bonus for the Japanese economy has been the influx
of tourists as the yen has depreciated. The Japanese government has achieved
its target of 10 million tourists in 2015, having deferred the target in the
wake of the Tohoku earthquake. The tourist bureau is now targeting 20 million
tourists by 2020 – the year of the Tokyo Olympics, and 30 million of tourists
by 2030. The trade surplus attributable to tourism was a record ¥527.3 billion
in the period, on the back of a record 9.14 million incoming tourists and a
concurrent 4.9% decline in departing Japanese nationals to 7.62 million. These
economic statistics are based upon an average forex rate of ¥120.28 for the
period – a 17.4% reduction over the previous period.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xii]</span></span><!--[endif]--></span> Japan’s
external accounts remain in good shape, with the nation recording its 12<sup>th</sup>
successive monthly current account surplus – the latest being ¥558.6 billion.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xiii]</span></span><!--[endif]--></span><o:p></o:p></div>
<h4>
The overarching problem<o:p></o:p></h4>
<div class="MsoNormal">
The problem however is not Japan’s external relationship
with the rest of the world, but rather the alienation of its unskilled
workforce and savers, who are bearing the bulk of the state’s burden. Part time work and low interest rates are undermining the wealth and income prospects for a great many Japanese people. There is
every possibility that Japan will eventually cope by:</div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -18pt;">Raising tax on assets</span></li>
<li><span style="text-indent: -18pt;">Raising immigration</span></li>
<li><span style="text-indent: -18pt;">Depreciating the currency</span></li>
<li><span style="text-indent: -18pt;">Retaining its mercantilist policy – if it
can expect to rely on any growth in the export economy</span></li>
<li><span style="text-indent: -18pt;">Reforming the economy – to boost Japan’s
long-term competitiveness.</span><span class="MsoEndnoteReference" style="text-indent: -18pt;"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xiv]</span></span></span></li>
</ul>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l6 level1 lfo5; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l6 level2 lfo5; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;">
</span>i.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Slashing business regulations<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l6 level2 lfo5; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;">
</span>ii.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Reducing corporate taxes<o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l6 level2 lfo5; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;">
</span>iii.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Facilitating industry diversification<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There is a great deal of concern about Japan’s debt levels.
The fact is however that the debt is ‘national’ debt, just as the US debt is
denominated in USD terms. Both countries are therefore not in a serious
problem in these terms. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The other problem is that the dispensation to date has been
to undermine the financial viability of most Japanese people for the sake of
asset-rich Japanese people who live in the middle of the cities. The central
hubs of Japan have experienced an asset ‘bubble’ that has not extended into the
suburban areas because their ‘negative real incomes’ and poorer job prospects
don’t invite such property investment. Nor does their lack of financial
literacy give them much change of raising their prospects.<o:p></o:p></div>
<h4>
The reform program to date<o:p></o:p></h4>
<div class="MsoNormal">
You could be forgiven for thinking that deflation is the
intractable problem undermining Japan’s economy given the attempts to resuscitate inflation. The problem however is not deflation, just as inflation is not the
solution. Deflation is actually natural and good. The problem is declining real
incomes (or ‘stagnant wages’), that undermines investment and spending. There
are of course economist theorists who will argue that ‘2% inflation’ is good
for growth because it purportedly brings forward spending. In fact, such
illusions are not valid. Certainly PM Shinzo Abe is not relying solely on
stimulus. This is merely the ‘grease’ of 'monetary illusion' to lubricate the adjustment period by
avoiding apprehensions. The key elements of the structural adjustment program
can be expected to be:</div>
<div class="MsoNormal">
</div>
<ul>
<li><b style="text-indent: -18pt;">Ending
subsidies for the rural economy</b><span style="text-indent: -18pt;"> – curtailing spending – these burdens are
being shifted to the ‘end of term’ of the government, so they are largely
weighing upon any incoming government.</span></li>
<li><b style="text-indent: -18pt;">Labour
market reform </b><span style="text-indent: -18pt;">which was already adopted by the previous LDP PM Koizumi, and
the corporate sector, when it wound back lifetime employment, and shifted a
great many workers to casual labour terms.</span></li>
<li><b style="text-indent: -18pt;">Reducing
material costs </b><span style="text-indent: -18pt;">by reducing tariffs on trade and the costs of poor regulation. This has the benefit of
reducing the size of government, and improving the sustainability of
government, given that it shifts the burden of government to those who can
afford (by virtue of profits) away from those who can't afford to carry it.</span></li>
</ul>
There are of course those who will argue that 'wealth needs to be placed in the hands of the rich in order to stimulate investment'. The truth is that this fails to acknowledge the disparity or 'wage gap' because Western and third world markets. We can say that the solution to Japan's dilemma, and every Western government is to 'slash the costs of living' by effectively ending all but the basic foundations for government, and thereafter privatising those, to ensure those services are performed efficiently. Efficiently demands consequences. If governments are free to extort wealth, they will not offer good service. No country in the West defies this 'truth', except Japan to the extent that Japan's bureaucrats are motivated by simple routines and an overarching sense of responsibility for the lives of others.<br /><div class="MsoListParagraphCxSpLast" style="mso-list: l7 level1 lfo6; text-indent: -18.0pt;">
<o:p></o:p></div>
<h4>
Further reform areas<o:p></o:p></h4>
<div class="MsoNormal">
In June 2014, the Abe administration offered its latest
outline of comprehensive reform measures, including corporate tax cuts, agriculture
liberalization and deregulation of the energy, environment, and health-care
sectors.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xv]</span></span><!--[endif]--></span> A
broad online of the critical reform measures by PM Abe are:</div>
<div class="MsoNormal">
</div>
<ul>
<li><b style="text-indent: -18pt;">Economic
stimulus</b><span style="text-indent: -18pt;"> in the form of:</span></li>
</ul>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l5 level1 lfo7; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;">
</span>i.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--><b>Fiscal
spending </b>largely on infrastructure construction as well as ‘key strategic
sectors’<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;"> </span>ii.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--><b>Quantitative
easing </b>to restore liquidity to the marketplace, so people can spend, and so
that the resulting currency depreciation will make the export sector more
competitive. <o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<span style="font-size: 7pt; font-stretch: normal; text-indent: -72pt;"> </span><span style="text-indent: -72pt;">iii.</span><span style="font-size: 7pt; font-stretch: normal; text-indent: -72pt;">
</span><b style="text-indent: -72pt;">Corporate
tax cuts </b><span style="text-indent: -72pt;">to inventivise wage rises and business investment.</span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<br />
<ul>
<li><b style="text-indent: -18pt;">Political
ind</b><b style="text-indent: -18pt;">ependence</b><span style="text-indent: -18pt;"> – Japan has long relied upon the US to preserve its political
security, with the US still preserving a number of naval and air bases in
Japan, such as Okinawa and Fussa. Proposed amendments to the Japanese
constitution are intended to surmount that ‘military dependency’.</span></li>
<li><b>Executive
disempowerment </b>– Executive government in Japan has long struggled with a
reliance upon the bureaucracy for information and analysis. Former PM Koizumi
was the first to develop certain capacities within the PM’s Office to develop
policy, with Cabinet having previously relied on the bureaucracy to advance
policy initiatives.</li>
<li><b>Social
reform </b>– There is a need for Japan to revise the way constituents think
about the government, society, and their relationship to it. There is an
entrenched ‘collectivism’ (or tribalism) in Japan that diminishes intellectual
independence. The pressing obstacles include:</li>
</ul>
</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l5 level1 lfo7; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;"> </span>i.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--><b>Attitudes
to immigration – </b>An influx of tourists might help that, or hinder.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;"> </span>ii.<span style="font-size: 7pt; font-stretch: normal;"> </span><b>Attitudes
to women</b> in the world place that has seen the erection of glass ceiling
that largely dissuade women from participating in economic activity – both in
absolute and qualitative terms. Female workforce participation is 10% lower
than the OECD average.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xvi]</span></span><!--[endif]--></span>
The government is intending to raise this level.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xvii]</span></span></span><br />
<br />
<ul>
<li><b>Regulatory
burden </b>– The business sector struggles to achieve outcomes when they are
subject to a litany of unnecessary impediments that undermine productivity and
profitability. These impediments are largely to blame for the historic
ascension of government-backed monopolies, be they private or publicly-owned, in
sectors such as power and agriculture. The solution is perceived to be privatization
(for instance – the utilities like TEPCO) and deregulation (i.e.
competitiveness). Among these obstacles are:</li>
</ul>
</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l5 level1 lfo7; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;"> </span>i.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Restrictions on the hiring and firing of staff. Lifetime
employment remains an obstacle to revitalisation of companies – particularly in
the upper echelons of companies. There has already been a great deal of reform
of the unskilled and lower echelons of Japanese corporations, however the
incumbents in the upper echelons have avoided any burden. The implication is
that there are about “5 million workers who can’t be laid off, even with
severance pay” whilst concurrently 40% of the Japanese workforce is struggling
to get regular or full-time work.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xviii]</span></span><!--[endif]--></span>
Considerable labour market reform has already seen a 6% contraction in the
labour force over the last decade.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xix]</span></span><!--[endif]--></span><o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;"> </span>ii.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Certain highly regulated ‘domestic sectors’ like
health. Japan's health-care providers argue the national health insurance
system would be adversely impacted if Japanese citizens are forced to buy
foreign-produced pharmaceuticals and medical devices.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xx]</span></span></span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;"> </span>iii.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->The construction sector still relies on its privileged
access to government contracts<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l5 level2 lfo7; mso-text-indent-alt: -18.0pt; text-indent: -72.0pt;">
<!--[if !supportLists]--><span style="font-size: 7pt; font-stretch: normal;"> </span>iv.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->The service sector is very inefficient because
cultural practices are burdensome and labour-intensive methods.<o:p></o:p><br />
<span style="font-size: 7pt; font-stretch: normal;"> </span>v.<span style="font-size: 7pt; font-stretch: normal;"> </span>Strategic changes in the tax incentives and investment model for government pension funds.<span class="MsoEndnoteReference">[xxii]</span><br />
<span style="font-size: 7pt; font-stretch: normal;"> </span>vi.<span style="font-size: 7pt; font-stretch: normal;"> </span>The Trans-Pacific Partnership Agreement (TPPA) negotiations are expected to transform, or otherwise curtail subsidies for the agricultural sector, which is small-scale, highly subsidised and inefficient. In Feb-2015, Abe reached a landmark agreement that diminished the power of the national agriculture cooperative, JA-Zenchu, to direct the electoral preferences of farmer-members, by offering short term concessions to farmers in exchange for reductions in cropping; that will facilitate the modernization of farming in Japan.<span class="MsoEndnoteReference">[xxi]</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The TPP is an ambitious plan to introduce a free trade
agreement between 12 countries (The United States, Japan, Brunei, Malaysia,
Vietnam, Singapore, Australia, New Zealand, Canada, Mexico, Chile and Peru)
encompassing two-fifths of world trade. Abe has had to offer generous support
to farmers for the next 5 years in order to advance the plan. The question is
whether they will simply ‘take the support’ then sabotage the plan. In Abe’s
favour is the fact that his opponents, the Democratic Party of Japan (DPJ),
promoted the TPPA whilst in power. Japan has historically been reluctant to
remove protection on the agricultural sector, particularly upon 5 “sacred”
agricultural products. In negotiations to day, the US has been able to reduce
steadfast support for protection to tariff protection upon ‘rice, wheat and
sugar’ in exchange for more generous import quotas. The other contentious areas
are tariffs on beef and pork.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxiii]</span></span><!--[endif]--></span><o:p></o:p></div>
<div class="MsoNormal">
The Trans-Pacific Partnership Agreement (TPPA)<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxiv]</span></span><!--[endif]--></span>
is a transformational regional free trade agreement for Japan and other Pacific
Rim countries. Japan’s farm sector have lobbied against the deal, objecting to
the removal of high tariffs and other protective measures.<o:p></o:p></div>
<h4>
The substantiveness of change<o:p></o:p></h4>
<div class="MsoNormal">
The problem for Abe is that all the good news for Japan
harks back to ‘negative sentiments’ rather than his policy initiatives.
Consider that:<br />
<br />
<ul>
<li>The terms of trade is positive because Japanese
people are not spending</li>
<li>The improvement in investment income and
corporate incomes is because of currency depreciation. One need only look
at production statistics. Factory output declined 3.4% in Feb-2015.<span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxv]</span></span></span></li>
<li>The improvement in exports is due to currency
depreciation</li>
<li>The fall in imports is due to currency
depreciation, low confidence as well as curtailment of energy imports (as
nuclear power stations are recommissioned).</li>
<li>Rising property and bond prices are due to
ultra-low interest rates; themselves an attempt to buoy demand. In years to come, those asset prices will eventually
‘return to reality’.</li>
</ul>
</div>
<div class="MsoNormal">
Almost all the rise in corporate earnings is due to the effects of a weaker yen, for example. It is nice for shareholders
to see prices rise as companies buy back their shares, but far better if
companies saw a compelling reason to invest to expand their core business.
Unfortunately, though, the population of Japan continues to dwindle. <o:p></o:p></div>
<div class="MsoQuote">
<blockquote class="tr_bq">
“In some ways Japan remains less part of the world than it
was in, say, the Taisho years almost 100 years ago. [Indeed] older people say
they would prefer to be looked after by a robot than by a foreigner, according
to one survey”.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: Verdana, sans-serif; font-size: 9pt;">[xxvi]</span></span><!--[endif]--></span></blockquote>
<o:p></o:p></div>
<div class="MsoNormal">
As long as the robot is operated by a foreigner, just like
Japan’s software, then everyone would be happy. Satisfying Japanese people is
all about preserving illusions. And yet Japanese people perplexingly and
tragically see the writing on the wall. <o:p></o:p></div>
<div class="MsoQuote">
<blockquote class="tr_bq">
“Many people in Japan refer to Uber as the “black cars”, in
the same spirit that harks back to the “Black Ships” of Commander Perry, which
forced Japan to open its trade.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: Verdana, sans-serif; font-size: 9pt;">[xxvii]</span></span><!--[endif]--></span></blockquote>
<o:p></o:p></div>
<div class="MsoNormal">
The fact is that, unless Japan takes significant strides to
open up its economy, then a great many companies are destined to abandon the
economy, despite its size. The economy is struggling for its lack of
‘openness’, its lack of population growth, and falling incomes. These tragic
prospects have even caused a number of Western companies to curtail their
investments in Japan, namely GE Capital and Citigroup.<o:p></o:p></div>
<div class="MsoNormal">
Japan has even struggled in those arenas where it can
side-step regulatory hurdles. Apart from the success of Rakuten, Japanese
technology companies in hardware have struggled to move into value-added software services (i.e. Toshiba or Fuji Film doing better than Fujitsu).
The bigger problem however is that ‘success’ is not commonplace, as most
companies have clung to their natural market position; the security of the
domestic Japanese market. A handful of large corporations have preserved their
strong market position, relying on their privileged position, rather than
evolving. For instance, domestic banks have been slow to adopt web-based
services, which has reduced their capacity to close branches, reduce banking
fees or reduce waiting times for services. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The problems are deep-set. Education is of course another
arena requiring reform, however it is not a type of reform that is going to
come easy because it harks back to the values that made Japan possible –
political privilege and cheap labour. Those values can no longer sustain the
nation, and the collapse in birth rates provide a clue as to why the economic
growth has arrested. Japan without capitulation is destined to drift into
oblivion. The realisation of this fateful path is inevitably the only realisation
that can spare it from this fate. There is a need for a foreigner to drive the
robot, whether that robot look Japanese or Western is less important. <o:p></o:p></div>
<div class="MsoNormal">
Autocratic teaching methods which thwart the intellectual
independence of Japan’s future wealth creators can only delay the hope of
Japan’s resurrection, or place the onus upon imported labour to drive that
restructuring. Without suitable education, ‘new age’ start-ups will be few and
far between, as their exponents will simply go abroad. Already there is
evidence of Japanese ‘thinkers’ finding opportunity abroad. Japan doesn't need more Western CEOs, it needs the 'spirit' of a Western CEO in the role of prime minister, just as the West needs. This is the popular realisation behind the appeal of Donald Trump. People are looking merely at the smoke, but the reality is that Trump would not retained his popularity if he engaged with people on issues. <o:p></o:p></div>
<h4>
Abenomics - Reforming Japan<o:p></o:p></h4>
<div class="MsoNormal">
When PM Shinzo Abe assumed office in Dec-2012, he was unable
to articulate a solid reform plan. His leadership was short-lived, however the
Japanese people nevertheless gave him a 2<sup>nd</sup> term from 2006, at which
point he outlined a new suite of policies to kick-start the stagnating economy.
Japan was caught in the midst of a deflationary spiral for two decades, with
successive leaders struggled to revitalize the economy. Abe in in the
midst of introducing a three-pronged approach, "Abenomics," combining
fiscal expansion, monetary easing and structural reform, had the ultimately
intent of concurrently boosting domestic demand and GDP, raising inflation to
2% and placing the economy on a competitive footing whence it could create ‘real
jobs’ and expand ‘real incomes’.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxviii]</span></span><!--[endif]--></span><o:p></o:p></div>
<div class="MsoNormal">
So far the stimulus has only resulted in muted ‘growth’ as
the market has not responded to the limited reforms to date. Inflation rose
slightly, but in the wake of collapsing commodity prices, it has since failed
to achieve the target. Abe however has not lost heart, though his support base
has floundered somewhat. There is of course always the prospect of further
aggressive monetary and fiscal stimulus, and further structural reforms. The fiscal
measures worth Y20.2 trillion ($US210 billion) included Y10.3 trillion ($US116
billion) of government spending.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxix]</span></span><!--[endif]--></span>
It was supported by concurrent quantitative easing by the Bank of Japan (BOJ) to
provide much-needed injection of liquidity to support the spending needed to achieve
2% inflation. The structural reforms — including reductions in regulations,
deregulation of labour markets, corporate tax cuts, have not achieved the much-<span style="background: yellow; mso-highlight: yellow;">vaunted</span> competitiveness.<o:p></o:p></div>
<div class="MsoNormal">
These are unprecedented levels of currency debasement by the
BOJ. If you consider that:<br />
<br />
<ul>
<li>The BOJ debt purchases are unprecedented<span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxx]</span></span></span></li>
<li>The reliance of the Japanese government is
concerning for a Western nation, and the world’s third largest economy. i.e.
With the value of the BOJ assets equal to 57% of GDP in 2014 – that’s more than
double the size of the U.S. Federal Reserve (25% of GDP) and ECB asset holdings
(20% of GDP) respectively.<span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxi]</span></span></span></li>
</ul>
</div>
<div class="MsoNormal">
The fiscal stimulus has mirrored the policies of recent
decades, with the primary benefactors being the construction companies
that support the LDP, as well as building ‘critical’ bridges, tunnels, and
earthquake-resistant roads. A relatively new aspect of the policy however was
explicit measures to stimulate private investment in strategic sectors.<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxii]</span></span><!--[endif]--></span>
Such stimulus has done nothing to rein in the public sector debt, <span style="background: yellow; mso-highlight: yellow;">as budget deficit persist at over 5% of GDP</span>. <span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxiii]</span></span><!--[endif]--></span> The deficit should fall below 3% after the GST is increased to 10%. There is every expectation of course that the GST and a revived economy will
raise public tax receipts, however this has yet to prove the case. In fact,
phase 1 of the GST hike to 8% in April 2014 correlated with reduced consumer
spending and a recession.<span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxiv]</span></span></span>
For this reason the 2<sup>nd</sup> hike in the GST to 10% has therefore been delayed until 2017.<span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxv]</span></span></span>
Japan is drawing no support from the global economy.<br />
<br />
For those readers interested in our <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Property Guide</a>, we are currently in the process of updating it. Readers can however avail of the current addition, and we will forward the new edition upon completion. There will be a price increase thereafter - and it won't be 2%. lol<br />
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div>
<b>Asian property markets outperforming</b> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a> <b><a href="http://sheldonthinks.ecrater.com/p/2660019/buying-philippines-property-2-volume-ebook">Philippines Property Guide</a></b><br />
<b>Profit from mining with</b> <a href="http://miningstocks.sheldonthinks.com/">Global Mining Investing eBook</a></div>
<div style="text-align: start;">
<div style="text-align: justify;">
<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
</div>
<br />
<div>
<!--[if !supportEndnotes]--><b>References</b><br />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<br />
<div id="edn1">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[i]</span></span><!--[endif]--></span>
“Japan recession worse than first reported”, Financial Times, <a href="http://www.ft.com/intl/cms/s/0/df71fdae-7e8e-11e4-87d9-00144feabdc0.html#axzz3RRrPGQiN">website</a>,
8<sup>th</sup> Dec 2014.<o:p></o:p></div>
</div>
<div id="edn2">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[ii]</span></span><!--[endif]--></span>
GDP result, Dec-2014 Qtr, Cabinet Office, Govt of Japan, <a href="http://www.esri.cao.go.jp/en/sna/data/sokuhou/files/2014/qe144_2/pdf/gaiyou1442_e.pdf">website</a>,
9<sup>th</sup> March 2015.<o:p></o:p></div>
</div>
<div id="edn3">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[iii]</span></span><!--[endif]--></span>
“Shinzo Abe loses ally in TPP trade deal”, Financial Times, <a href="http://www.ft.com/intl/cms/s/0/f737aba6-bb41-11e4-a31f-00144feab7de.html?siteedition=intl#axzz3TCGdcYql">website</a>,
23<sup>rd</sup> Feb 2015.<o:p></o:p></div>
</div>
<div id="edn4">
<div class="MsoEndnoteText">
<a href="file:///C:/Andrew/caNotes/Notes-Aug2015b.docx#_ednref4" name="_edn4" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[iv]</span></span><!--[endif]--></span></a>
“The Abe habit: Shinzo Abe wins again, but what will he do with his mandate?”,
The Economist, <a href="http://www.economist.com/news/asia/21636792-shinzo-abe-wins-again-what-will-he-do-his-mandate-abe-habit?zid=309&ah=80dcf288b8561b012f603b9fd9577f0e">website</a>,
20<sup>th</sup> Dec 2014.<o:p></o:p></div>
</div>
<div id="edn5">
<div class="MsoNormal">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[v]</span></span><!--[endif]--></span>
“Japan stocks rise on stimulus hopes
after poor economic data”, NZ Herald, <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11498577&ref=newsl_afternoonnewsdirect_J20080609_142008_1716_1129_825738151">website</a>, 17<sup>th</sup> Aug 2015.<o:p></o:p></div>
</div>
<div id="edn6">
<div class="MsoNormal">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[vi]</span></span><!--[endif]--></span>
“Japan’s economy shrinks as
consumption, investment fall”, Japan Times & Bloomberg, <a href="http://www.japantimes.co.jp/news/2015/08/17/business/economy-business/japan-economy-shrinks-as-consumption-investment-fall/?utm_source=Daily+News+Updates&utm_campaign=ae248482ef-Thursday_email_updates18_08_2015&utm_medium=email&utm_term=0_c5a6080d40-ae248482ef-331567553#.VdKJMPmqqko">website</a>,
17<sup>th</sup> Aug 2015.<o:p></o:p></div>
</div>
<div id="edn7">
<div class="MsoNormal">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[vii]</span></span><!--[endif]--></span>
“Japan’s economy shrinks as
consumption, investment fall”, Japan Times & Bloomberg, <a href="http://www.japantimes.co.jp/news/2015/08/17/business/economy-business/japan-economy-shrinks-as-consumption-investment-fall/?utm_source=Daily+News+Updates&utm_campaign=ae248482ef-Thursday_email_updates18_08_2015&utm_medium=email&utm_term=0_c5a6080d40-ae248482ef-331567553#.VdKJMPmqqko">website</a>,
17<sup>th</sup> Aug 2015.<o:p></o:p></div>
</div>
<div id="edn8">
<div class="MsoNormal">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[viii]</span></span><!--[endif]--></span>
“Japan logs largest January-June
current account surplus since 2010”, Japan Times & KYODO, <a href="http://www.japantimes.co.jp/news/2015/08/10/business/japan-logs-largest-january-june-current-account-surplus-since-2010/?utm_source=Daily+News+Updates&utm_campaign=ced1fcb6cd-Thursday_email_updates11_08_2015&utm_medium=email&utm_term=0_c5a6080d40-ced1fcb6cd-331567553#.VclXUPmqqkoc">website</a>, 10<sup>th</sup> Aug 2015.<o:p></o:p></div>
</div>
<div id="edn9">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[ix]</span></span><!--[endif]--></span>
“BOJ’s Kuroda Signals Desire for Stable Yen” by Takashi Nakamichi & Tatsuo
Ito, Wall Street Journal, <a href="http://www.wsj.com/articles/bank-of-japan-stands-pat-on-policy-1424229828">website</a>,
18<sup>th</sup> Feb 2015.<o:p></o:p></div>
</div>
<div id="edn10">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[x]</span></span><!--[endif]--></span>
“Nikkei retreats from near 8-year high as Greek drama drags on” by Ayai
Tomisawa, Reuters, <a href="http://www.reuters.com/article/2015/02/17/markets-japan-stocks-idUSL4N0VR1EV20150217">website</a>,
Feb 16, 2015.<o:p></o:p></div>
</div>
<div id="edn11">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><a href="file:///C:/Andrew/caNotes/Notes-Aug2015b.docx#_ednref11" title=""><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xi]</span></span></a>,</span><span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><a href="file:///C:/Andrew/caNotes/Notes-Aug2015b.docx#_ednref12" name="_edn12" title="">[xii]</a> & </span></span></span><a href="file:///C:/Andrew/caNotes/Notes-Aug2015b.docx#_ednref13" name="_edn13" title=""><span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xiii]</span></span></span></a>
“Japan logs largest January-June
current account surplus since 2010”, Japan Times & KYODO, <a href="http://www.japantimes.co.jp/news/2015/08/10/business/japan-logs-largest-january-june-current-account-surplus-since-2010/?utm_source=Daily+News+Updates&utm_campaign=ced1fcb6cd-Thursday_email_updates11_08_2015&utm_medium=email&utm_term=0_c5a6080d40-ced1fcb6cd-331567553#.VclXUPmqqkoc">website</a>, 10<sup>th</sup> Aug 2015.</div>
</div>
<div id="edn13">
<div class="MsoEndnoteText">
<o:p></o:p></div>
</div>
<div id="edn14">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xiv]</span></span> & </span><span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xv]</span></span></span> “Abenomics
and the Japanese Economy” by <a href="http://www.cfr.org/experts/world/james-mcbride/b20492">James McBride</a>,
Council for Foreign Relations, <a href="http://www.cfr.org/japan/abenomics-japanese-economy/p30383">website</a>,
10<sup>th</sup> March 2015; “Shinzo Abe updates Japan’s Third Arrow”, Financial
Times, <a href="http://www.ft.com/intl/cms/s/0/0be91cc4-f54a-11e3-91a8-00144feabdc0.html?siteedition=intl#axzz3S1Ddmtga">website</a>,
16<sup>th</sup> June 2014.</div>
</div>
<div id="edn15">
<div class="MsoEndnoteText">
<o:p></o:p></div>
</div>
<div id="edn16">
<div class="MsoNormal">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xvi]</span></span><!--[endif]--></span>
“Japanese Economy”, Lowy Institute, <a href="http://www.lowyinstitute.org/issues/japanese-economy">website</a>,
retrieved 16<sup>th</sup> Aug 2015.<o:p></o:p></div>
</div>
<div id="edn17">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xvii]</span></span><!--[endif]--></span>
“Attitude change needed to shake up the workforce” by Philip Brasor, Japan
Times, <a href="http://www.japantimes.co.jp/news/2012/11/25/national/media-national/attitude-change-needed-to-shake-up-the-workforce/#.VdLEyvmqqkp">website</a>,
25<sup>th</sup> Nov 2012.<o:p></o:p></div>
</div>
<div id="edn18">
<div class="MsoNormal">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xviii]</span></span><!--[endif]--></span>
“Which Parts of Japan’s Economy Most Need Reform Right Now?” by Stephanie
Johnson, Market Realist, <a href="http://marketrealist.com/2015/07/japan-need-reform/">website</a>, 14<sup>th</sup>
July 2015; “Japan’s Third Arrow is more like 1,000 trial needles”, Financial
Times, <a href="http://www.ft.com/intl/cms/s/f6413fc6-f654-11e3-902a-00144feabdc0,Authorised=false.html?siteedition=intl&_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Ff6413fc6-f654-11e3-902a-00144feabdc0.html%3Fsiteedition%3Dintl&_i_referer=&classification=conditional_standard&iab=barrier-app#axzz3S1Ddmtga">website</a>,
18<sup>th</sup> June 2014.<o:p></o:p></div>
</div>
<div id="edn19">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xix]</span></span><!--[endif]--></span>
“Abenomics can clear Japan’s demographic hurdle” by Andy Mukherjee, Reuters, <a href="http://blogs.reuters.com/breakingviews/2013/03/14/abenomics-can-clear-japans-demographic-hurdle/">website</a>,
14<sup>th</sup> Mar 2013.<o:p></o:p></div>
</div>
<div id="edn20">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xx]</span></span><!--[endif]--></span> “Abenomics
and the Japanese Economy” by <a href="http://www.cfr.org/experts/world/james-mcbride/b20492">James McBride</a>,
Council for Foreign Relations, <a href="http://www.cfr.org/japan/abenomics-japanese-economy/p30383">website</a>,
10<sup>th</sup> March 2015.<o:p></o:p></div>
</div>
<div id="edn21">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxi]</span></span><!--[endif]--></span>
“Abe’s Third Arrow Finds Its Mark” by Tobias Harris, <a href="http://www.wsj.com/articles/tobias-harris-abes-third-arrow-finds-its-mark-1423675406">website</a>,
11<sup>th</sup> Feb 2015.<o:p></o:p></div>
</div>
<div id="edn22">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxii]</span></span><!--[endif]--></span>
“Abenomics and the Japanese Economy” by <a href="http://www.cfr.org/experts/world/james-mcbride/b20492">James McBride</a>,
Council for Foreign Relations, website,
10<sup>th</sup> March 2015.<o:p></o:p></div>
</div>
<div id="edn23">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxiii]</span></span><!--[endif]--></span>
“Japanese Economy”, Lowy Institute, <a href="http://www.lowyinstitute.org/issues/japanese-economy">website</a>,
retrieved 16<sup>th</sup> Aug 2015.<o:p></o:p></div>
</div>
<div id="edn24">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxiv]</span></span><!--[endif]--></span>
“The Trans-Pacific Partnership (TPP) Negotiations and Issues for Congress”, Congressional
Research Service, <a href="http://www.fas.org/sgp/crs/row/R42694.pdf">website</a>,
20<sup>th</sup> March 2015.<o:p></o:p></div>
</div>
<div id="edn25">
<div class="MsoNormal">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxv]</span></span>, </span><span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxvi]</span></span></span> & <span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxvii]</span></span></span>
“Reforms needed to lift Japan’s economy” by Henny Sender, Financial Times, <a href="http://www.ft.com/intl/cms/s/0/47ef7802-dc77-11e4-a6f7-00144feab7de.html#axzz3j3AhYCUw">website</a>,
7<sup>th</sup> April 2015.</div>
</div>
<div id="edn27">
<div class="MsoNormal">
<o:p></o:p></div>
</div>
<div id="edn28">
<div class="MsoNormal">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxviii]</span></span><!--[endif]--></span>
“Abenomics and the Japanese Economy” by <a href="http://www.cfr.org/experts/world/james-mcbride/b20492">James McBride</a>,
Council for Foreign Relations, <a href="http://www.cfr.org/japan/abenomics-japanese-economy/p30383">website</a>,
10<sup>th</sup> March 2015.<o:p></o:p></div>
</div>
<div id="edn29">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxix]</span></span><!--[endif]--></span>
“Emergency Economic Measures for The Revitalization of the Japanese Economy”,
Cabinet Office, Govt of Japan, <a href="http://www5.cao.go.jp/keizai1/2013/130111_emergency_economic_measures.pdf">website</a>,
11<sup>th</sup> Jan 2013.<o:p></o:p></div>
</div>
<div id="edn30">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxx]</span></span><!--[endif]--></span>
“Bank of Japan Beats Fed, ECB in Gulping Assets: Chart of the Day” by <a href="http://www.bloomberg.com/authors/AOYeezNBt5k/toru-fujioka">Toru Fujioka</a>
& <a href="http://www.bloomberg.com/authors/ABtmbEgxvUE/scott-lanman">Scott
Lanman</a>, Bloomberg, <a href="http://www.bloomberg.com/news/articles/2015-01-07/bank-of-japan-beats-fed-ecb-in-gulping-assets-chart-of-the-day">website</a>,
8<sup>th</sup> Jan 2015. <span style="background: yellow; mso-highlight: yellow;">See
chart</span>.<o:p></o:p></div>
</div>
<div id="edn31">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxi]</span></span><!--[endif]--></span>
“Abenomics and the Japanese Economy” by <a href="http://www.cfr.org/experts/world/james-mcbride/b20492">James McBride</a>,
Council for Foreign Relations, <a href="http://www.cfr.org/japan/abenomics-japanese-economy/p30383">website</a>,
10<sup>th</sup> March 2015.<o:p></o:p></div>
</div>
<div id="edn32">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxii]</span></span><!--[endif]--></span>
“Japan’s Abe Unveils 10.3 Trillion Yen Fiscal Stimulus: Economy” by Keiko
Ujikane, Bloomberg, <a href="http://www.bloomberg.com/news/articles/2013-01-11/japan-s-abe-unveils-10-3-trillion-yen-fiscal-boost-to-growth">website</a>,
11<sup>th</sup> Jan 2013; “Shinzo Abe unleashes a (small) stimulus package”,
The Economist, <a href="http://www.economist.com/news/finance-and-economics/21637410-shinzo-abe-unleashes-small-stimulus-package-pump-priming?zid=309&ah=80dcf288b8561b012f603b9fd9577f0e">website</a>,
30<sup>th</sup> Dec 2014.<o:p></o:p></div>
</div>
<div id="edn33">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxiii]</span></span><!--[endif]--></span>
“Big Swings in Japan Government Bonds Raise Hopes, Doubts about Abenomics” by
Eleanor Warnock, Wall Street Journal, <a href="http://www.wsj.com/articles/big-swings-in-japan-government-bonds-raise-hopes-doubts-about-abenomics-1424169042?KEYWORDS=japan">website</a>,
17<sup>th</sup> Feb 2015.</div>
</div>
<div id="edn34">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxiv]</span></span><!--[endif]--></span>
“Defying expectations, Japan’s economy falls into recession” by Jonathan Soble,
NY Times, <a href="http://www.nytimes.com/2014/11/17/business/international/defying-expectations-japans-economy-shrinks-further.html?_r=0">website</a>,
16<sup>th</sup> Nov 2014.<o:p></o:p></div>
</div>
<div id="edn35">
<div class="MsoEndnoteText">
<span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[xxxv]</span></span><!--[endif]--></span>
“Japan affirms pledge to raise consumption tax in 2017”, Financial Times, <a href="http://www.ft.com/intl/cms/s/0/438d8d36-b2a0-11e4-b234-00144feab7de.html#axzz3S1Ddmtga">website</a>,
12<sup>th</sup> Feb 2015.</div>
</div>
</div>
</div>
Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0Tokyo, Japan35.6894875 139.6917063999999321.7112815 119.03740939999993 49.6676935 160.34600339999992tag:blogger.com,1999:blog-1830657147021971416.post-27582917597638017982015-08-08T19:33:00.000-07:002015-08-08T19:37:35.249-07:00AirBNB poses risks and opportunities<div style="text-align: justify;">
We have long known that technology is disruptive. You have to ask however what impact technology will have on our lives looking forward. No where is such consideration more important that in the asset market. The reason why this is the case is because conceptually, the value of assets or wealth is to be measured in terms of 'the net present value of future incomes', or the potential for certain assets to yield those incomes. This is the quantification of value. What happens where there is too much money chasing too few assets, is that there is an economic imbalance, that is resulting in the financial markets trumping the real economy. We have the bidding up of asset prices in most 'aspirational' growth markets, prompting financial relativism. Money is undermining the yields on the assets being bid up. Lower interest rates are part of that, but consider the impact of AirBNB.<br />
<br />
AirBNB is having two impacts:<br />
a. It is collapsing yields through competition<br />
b. It is introducing property stock to the market that would not otherwise be there.<br />
<br />
Consider the <a href="https://www.google.com.ph/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCIQFjABahUKEwjW5tbi-5rHAhWEsJQKHdtZBO0&url=http%3A%2F%2Fphilippinesrealestate.sheldonthinks.com%2F&ei=qrzGVdbpMoTh0gTbs5HoDg&usg=AFQjCNFEvQns5ewXFLNKD3F0Wcu8fdzCSg&sig2=rr0umihowGpPTtugMbTVuA&bvm=bv.99804247,d.dGo">Philippines </a>for instance, or <a href="https://www.google.com.ph/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=0CEoQFjAFahUKEwjBp8X2-5rHAhWIopQKHXfDD2k&url=http%3A%2F%2Fforeclosured.blogspot.com%2F&ei=1LzGVcHtHYjF0gT3hr_IBg&usg=AFQjCNHmlm5H2bi9samrMb9HKXubqVZkXg&sig2=IBW0v4OjKvHAMREixEP28A&bvm=bv.99804247,d.dGo">Japan</a>. There are a lot of Filipino expats in the US or Middle East earning money, and the sales-spruiking agents from SM, Robinsons, are targeting the financially naive expats with 'yields' on investment, or property portfolios whilst they are cheap. In Japan, there are a lot of Chinese people buying up investment condos. The 'trade' is not as big as has been 'mooted' in the press, however it is occurring. There is no gross over-supply. In fact, the prospects for AirBNB to add utility and flexibility to property renting is a far bigger phenomenon.<br />
The reality is that, whilst these markets are cheap compared to Western markets, they are in oversupply given the poor utilisation of those assets. The problem is that many of these units bought for personal use, or maybe rental, are going to find their way onto AirBNB, and their competitiveness is going to come under attack from other providers, whose profit motive might be marginal, because they only need to cover costs. Clearly those people holding stock as 'investors' are most vulnerable if they are indebted, and interest rates rise. There is no prospect of that. But is does suggest that the property market is a candle being 'burnt from both ends':<br />
a. The yields on investor property are being undermined by increased stock and the greater ease of 'self-listing' properties through AirBNB.<br />
b. The yields on hotel property portfolios are going to come under attack from AirBNB. Why stay in a hotel when you can stay in a more flexible 'short term' AirBNB accommodation for 7-day stints closer to your preferred location, with less sensitivity to price, and avoid the add-on costs of hotels like telephone, internet, food. This point makes more sense in a place like the Philippines where condos are increasingly integrated with malls.<br />
c. Ultimately commercial properties are destined to come under similar attack as people become more mobile, there is greater use of contractors, and people working from home.<br />
<br />
The entire property market is under a revolution and no one is talking about this phenomenon. In fact, governments are seemingly going in the opposite direction of making property even less enticing with higher costs, i.e. They are restricting zoning, driving up prices which raises property rates (taxes), and of course subsidising interest rates.<br />
<br />
This is a gigantic crisis. There is no reason to expect imminent crisis. AirBNB will take years to work its way into a serious market phenomenon. Its still new, however the trend is clear. The interesting issue is that AirBNB will just make property prices go 'less high' by driving down yields. It might make one however question the 'validity' of statistics that might use 'traditional' rental prices as a measure of market health (i.e. yields).<br />
<br />
It would not be surprising to see governments take the 'perverse' position of blaming AirBNB for the collapse of property in years to come. The reality is that AirBNB is a god-send for better asset utilisation. The problem is ultimately subsidised credit and the 'protracted' low unskilled wages that have become a 'drug' for the global economy. They were caused by the autocratic, statist regimes in 'the third world economies', which today we consider 'the emerging markets'. The problem is that we are going to see people blaming the market for these outcomes, however it was always a 'political crisis' in the making.<br />
<br />
Japan yields are actually very reasonable, as as Philippines and Indonesian yields, so we are not singling these markets out as if they were 'overpriced'. They are going to rise in price. The issue is not the 'yields' on these markets, but the warning. There is a crisis in the future, and these markets are opportunities for the next decade. Most Western markets are in fact the 'risk markets'. They are already overpriced. When matters read a head, rental properties are competing with a friend on Facebook with a spare bed. More scary is the fact that AirBNB presents a more flexible scary risk to such property because AirBNB listings are everywhere. They are closer to any particular place you need to be, or want to be.<br />
<br />
With so much human capital invested in this market, AirBNB represents a transformational change that will 'upset' property markets, to an extent greater than Facebook and Google Adwords transformed advertising. Why? The value of the underlying assets affected. This does not stop property prices going higher; it means that property prices will inevitably collapse to a lower yield when those lower 'competitive' rents work their way through the market.<br />
<br />
<b>Asian property markets outperforming</b> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a> <b><a href="http://sheldonthinks.ecrater.com/p/2660019/buying-philippines-property-2-volume-ebook">Philippines Property Guide</a></b><br />
<b>Profit from mining with</b> <a href="http://miningstocks.sheldonthinks.com/">Global Mining Investing eBook</a></div>
<div>
<div style="text-align: justify;">
<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
</div>
<br />Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-34258041307188538472014-11-17T03:00:00.000-08:002014-11-17T14:49:18.482-08:00Japan Needs to Restructure its Tax System as the Nation Struggles to Restore Economic Growth<div style="text-align: justify;">
<div class="MsoNormal">
Japan has fallen back into a ‘technical’ recession after
recording its 2<sup>nd</sup> successive quarter of negative growth. Japanese
GDP fell by 0.4% (or an annualised rate of -1.6%) in the 3rd-quarter of 2014. Reuters
had forecast economic growth of 0.5% (or annualised growth of 2.1%). Quarterly
figures are misleading in the context of the sales tax hike, as it’s probable
that people brought forward expenses in the 2<sup>nd</sup> quarter (contraction
of -1.83%, or annualised rate of 7.3%). Based on statistical evidence, private
households are not responding to the stimulus, with private consumption,
representing 60% of economic activity, rising just 0.4%.<o:p></o:p><br />
<br /></div>
<div class="MsoNormal">
Equity markets understandably took the contraction badly,
with the <a href="https://www.google.com/finance?q=INDEXNIKKEI%3ANI225&ei=uHNpVJn9J6WciQL8xIG4Ag">Nikkei-225</a>
falling 3% (517pts) to 16,973pts in response to the news. This follows a strong
recovery in the Japanese market since the BOJ revealed an expanded stimulus
program. The Yen was also <a href="https://www.google.com/finance?q=USDJPY&ei=oXRpVJnBO-jTigKYj4GwAQ">weaker</a>
by 0.85%, falling to 115.58 Yen against the USD, taking the Yen to a 7-year
high. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Clearly there was a lack of confidence by Japanese business
leaders and consumers in the sustainability of the Japanese recovery. This poor
result can be attributed to:</div>
<div class="MsoNormal">
</div>
<ol>
<li><span style="text-indent: -18pt;">A lack of substantive reform</span></li>
<li><span style="text-indent: -18pt;">The increase in the sales tax rate from 5% to 8%
in April 2014.</span></li>
<li><span style="text-indent: -18pt;">The subdued growth in exports – apart from the
one-off ‘yen-depreciation’ gains</span></li>
<li><span style="text-indent: -18pt;">The interim nature of the data. There is still corporate
‘capital items’ to be reported which will marginally improve the revised
numbers, yet the final figure will still look bad.</span><span class="MsoEndnoteReference" style="text-indent: -18pt;"><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><a href="file:///C:/Andrew/caNotes/Notes-Nov2014b.docx#_edn1" name="_ednref1" style="text-indent: -18pt;" title="">[i]</a></span></span></span></li>
<li><span style="text-indent: -18pt;">The government’s attempt to “flog a dead horse”
by attempting to use stimulus to boost inflation. It is ludicrous because he is
not pursuing the right monetary settings to achieve that goal.</span></li>
</ol>
<br />
<div class="MsoNormal">
The policy is poorly conceived for a number of reasons. The
principle objective is to rebalance the public sector budget and to revitalise
the economy. If they can revitalise the economy, then this will go a long way
towards removing budgetary pressures. The problem is that:</div>
<div class="MsoNormal">
</div>
<ol>
<li><span style="text-indent: -18pt;">Executive Japanese governments are renown for cowardice.
They simply don’t have the ‘braze balls’ to pursue policies that will impact the Japanese people.</span></li>
<li><span style="text-indent: -18pt;">Japan's government simply does not have the
courage to cut spending on public works that have sustained a substantial amount
of domestic demands, even if it has been hugely inefficient and raised the
public debt to ridiculous levels. The good news is that most of this debt is
being carried by the Japanese people, so it is easy for the Japanese government
to simply raise taxes or inflation to recapitalise the economy.</span></li>
<li><span style="text-indent: -18pt;">Japanese households are struggling to save given
their lack of financial literacy, as well as the poor return on traditional ‘bonds’.
The greater folly is that the Japanese government has abused pensioner savings
by investing in domestic infrastructure, which has offered investors and the
economy a sub-optimal benefit. Few other nations want to invest in government
bonds that return a paltry yield of just 0.4%; least of all when the currency
is being rapidly debased. The low-medium income Japanese investor is a sucker
for it.</span></li>
<li><span style="text-indent: -18pt;">The Japanese distribution of income is very
tight so a great many families are struggling on low incomes. The implication
is that a lot of households are vulnerable to a rise in sales taxes. The last
rise from 5% to 8% occurred in April 2014, and a further rise to 10% is
scheduled for Oct 2015.</span></li>
<li><span style="text-indent: -18pt;">Given the slack economy, many commentators are
expecting the Japanese government to defer the last tax increase until 2017. The
problem however is that Abe is attempting to place the burden on the
households, and that is just outrageous when you consider the wage restraint
imposed upon the economy. The government should be taxing capital, with the
ultimately intent to boosting the return on capital, as well as stimulating
consumption. That would be particularly sensible strategy given that is where the asset appreciation is. The most sensible way to achieve this might be by ending 'centralised government'. Rather than central governments dispersing funds to prefectural and city governments, it would probably make more sense to bestow a greater responsibility upon local government to carry administrative burdens. </span></li>
</ol>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-gJC30D06PmA/VGp7TZ0mZlI/AAAAAAAAJ40/AQLFQ-_Z8m8/s1600/japan%2Brecession.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-gJC30D06PmA/VGp7TZ0mZlI/AAAAAAAAJ40/AQLFQ-_Z8m8/s1600/japan%2Brecession.jpg" height="424" width="640" /></a></div>
<div style="text-indent: -24px;">
<br /></div>
<div style="text-indent: -24px;">
<br /></div>
The rationale for taxing consumers is to stimulate business
activity, however this is a ludicrous idea when:<br />
<div class="MsoNormal">
</div>
<ol>
<li><span style="text-indent: -18pt;">External markets are subdued</span></li>
<li><span style="text-indent: -18pt;">Wage growth is subdued because the reform initiative
has been mute</span></li>
</ol>
<br />
<div class="MsoNormal">
<b>Domestic costs need to fall and the best approach is not to
raise consumption taxes, but to reduce the burden on the Japanese people. This
can be done by:</b></div>
<div class="MsoNormal">
</div>
<ol>
<li><span style="text-indent: -18pt;"><b>Boosting immigration</b>, and Abe is certainly looking
at that, whilst concurrently scaling up the nationalistic rhetoric.</span></li>
<li><span style="text-indent: -18pt;">Speeding up the pace of political and industry
reform that promise to cut the costs of living and to add dynamism to the
economy. We have electricity privatisation in 2015, however more is required.</span></li>
<li><span style="text-indent: -18pt;"><b>Cutting spending</b> so that the consumer has
greater discretion to optimise their own spending. It cannot rely on stronger
external trade in the current context.</span></li>
<li><span style="text-indent: -18pt;">Speeding up privatisation so that capital can be
more efficiently employed</span></li>
<li><span style="text-indent: -18pt;"><b>Tax reform</b> that shifts the burden of the state
from the consumer to the holders of capital</span></li>
</ol>
<br />
<div class="MsoNormal">
The corporate sector, given its exposure to weaker yen were
able to contribute in terms of ‘record profits’, however this is not real
growth. The problem of course is that Japan cannot look to the external account
to boost Japan because of the weak global economy. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There is a propensity for economic commentators to not
understand inflation. The Bank of Japan's (BOJ) has a ludicrous goal of 2% inflation.
You cannot blow out money supply by a massive 40% and persist in wondering why
there is no inflation. They look at inflation as a simple ‘demand phenomenon’,
so when they look at inflation and see no inflation, they think ‘the economy
needs more pump-priming’. The reality however is that the ‘pump priming’ is
boosting asset prices (i.e. asset inflation), not the ‘cost of living’
inflation that affects workers. There is a good reason why this is the case and
it is the immense ‘oversupply’ of unskilled labour in the global marketplace,
and Japan is no exception. Only among the higher skilled workers is there a
rise in incomes. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
We clearly see evidence of asset inflation with the Nikkei
off its 7.5 year high of 17,500pts. In the case of Japan, the asset inflation
is largely confined to the equity market and inner-city property markets, which
offer the most tangible exposure to assets in a depopulating market. The
property market does however offer substantive opportunity for future gains if
there is evidence of economic reforms that auger well for real income growth.
In the short term, the property market is destined to be constrained by:</div>
<div class="MsoNormal">
</div>
<ol>
<li><span style="text-indent: -18pt;">Negative growth in real income</span></li>
<li><span style="text-indent: -18pt;">Slack employment growth</span></li>
<li><span style="text-indent: -18pt;">Low consumer and business confidence</span></li>
<li><span style="text-indent: -18pt;">Negative population growth</span></li>
</ol>
<br />
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo4; text-indent: -18.0pt;">
<o:p></o:p></div>
<div style="border-bottom: solid windowtext 1.0pt; border: none; mso-border-bottom-alt: solid windowtext .75pt; mso-element: para-border-div; padding: 0cm 0cm 1.0pt 0cm;">
<div class="MsoNormal" style="border: none; mso-border-bottom-alt: solid windowtext .75pt; mso-padding-alt: 0cm 0cm 1.0pt 0cm; padding: 0cm;">
The only positive aspect is that
despite ‘negative’ overall population growth, there is still migration of
people to the cities. Rather than people going to the city centres, a great
many of these youthful Japanese are turning to the outer areas of Tokyo, which
are far cheaper. <o:p></o:p></div>
<div class="MsoNormal" style="border: none; mso-border-bottom-alt: solid windowtext .75pt; mso-padding-alt: 0cm 0cm 1.0pt 0cm; padding: 0cm;">
The rationale for an election is
simply because Abe’s opponents are divided and weak. It would be opportune to
call an election whilst that remains the case, but why now? There is no reason
why he can’t defer the sales tax, but there is an imperative that he is seen to
be carrying through with his reform mandate. There is every possibility that
Abe will look to other measures like immigration to boost the economy. Expect
the influx of tourists to help placate Japanese fears of increased immigration.
<o:p></o:p></div>
<div class="MsoNormal" style="border: none; mso-border-bottom-alt: solid windowtext .75pt; mso-padding-alt: 0cm 0cm 1.0pt 0cm; padding: 0cm;">
<br /></div>
<div class="MsoNormal" style="border: none; mso-border-bottom-alt: solid windowtext .75pt; mso-padding-alt: 0cm 0cm 1.0pt 0cm; padding: 0cm;">
</div>
</div>
<div>
<!--[endif]-->
<br />
<div id="edn1">
<div class="MsoNormal">
<a href="file:///C:/Andrew/caNotes/Notes-Nov2014b.docx#_ednref1" name="_edn1" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-NZ; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[i]</span></span><!--[endif]--></span></a>
Comment by Yoshito Sakakibara, Executive Director - Investment Research, JP
Morgan; “Japan's economy contracts in third quarter” by <a href="http://www.cnbc.com/id/100331167">Li Anne Wong</a>, CNBC.com, <a href="http://www.cnbc.com/id/102184733">website</a>, 17<sup>th</sup> Nov 2014.<o:p></o:p></div>
</div>
</div>
<br />
<b>Asian property markets outperforming</b> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a> <b><a href="http://sheldonthinks.ecrater.com/p/2660019/buying-philippines-property-2-volume-ebook">Philippines Property Guide</a></b><br />
<b>Profit from mining with</b> <a href="http://miningstocks.sheldonthinks.com/">Global Mining Investing eBook</a></div>
<div>
<div style="text-align: justify;">
<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
</div>
<br />Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0Japan36.204824 138.25292410.026835000000002 96.944330000000008 62.382813 179.561518tag:blogger.com,1999:blog-1830657147021971416.post-82769140569144107222014-03-20T16:19:00.000-07:002014-03-20T16:19:11.211-07:00Land price rise highlights the reform initiative - but more required<div style="text-align: justify;">
One gets the sense that Abe is causing a lot of angst in Japan. The positive side is that he is appealing to all interests, whether its nationalists, conservatives, and even liberals. He is causing a lot of controversy and derision for his policies as a result; but might in the process he win favour for simply 'doing something' big. Its early days, but Abe is doing a number of important things:<br />
1. <b>Constitutional change</b> - We are hearing 'noises' from liberals (mostly lawyers), but aren't indolent Japanese citizens destined to simply trust him to take them on the right path. We might wonder if the provisions sought are the end of the story, or a precursor for more power. From a collectivist government, that cannot be a good thing, even if the threat posed is not Abe, but a latter leader. But then maybe those constitutional protections were never what we wanted or expected. NZ seeks no less protected than any other nation 'with a constitution'.<br />
2. <b>Tax increases</b> - Not something to celebrate but at least the government is addressing the fiscal imbalance. Does a reform program need more spending or less? I would argue more private spending and less government spending, but that is not going to occur until the private sector sees real progress, so he could be forgiven for spending.<br />
3. <b>Immigration </b>- Recently we have seen the Abe administration open the nation to Asian tourists, as well as the adoption of a new class of visa. i.e. Gaijin ('foreigners') under the proposal, if they have good jobs, stable incomes, needed skills, are destined to be offered permanent residency in Japan. This is surely a measure to improve population demographics. i.e. Aging population, rural depopulation.<br />
4. <b>Child protection</b> - After decades of inaction, there are signs that Japan is finally entering the fold for the protection of children caught up in international marriages.<br />
5. <b>Stimulus </b>- This is perhaps the less impressive move, though it was a brazen some compared to the historic legacy. I would argue that it did not achieve anything, however you could argue that it did boost economic activity in a period of transformation. But its not really happened yet. Perhaps it was only meant to 'encourage people', so the real action would be favourably received.<br />
6. <b>Higher land prices</b> - Land prices had bottomed in 2006, however they have been lacklustre of late, but more recently still, they show <a href="http://www.japantimes.co.jp/news/2014/03/18/business/land-prices-rise-in-big-metro-areas/#.UytxKaiSz-t">signs of improvement</a>. Signs of inflation are not enough though, the government will need to do more to post real wages as well. It has encouraged businesses to do so, but to no avail yet. Consider however some reforms.<br />
7. <b>Trade reform:</b> Japan has been an enthusiastic supporter of tariff reductions. Until recently, it was reluctant to cut tariffs on rice, however concessions have been made, and policies have been adopted to reform agriculture in the nation.<br />
<br />
In my book '<a href="http://www.sheldonthinks.ecrater.com/p/11307514/japan-foreclosed-property-2011-12-ebook">Japan Foreclosed Property</a>', I discuss how in the last few hundred years that Japan has been moved by both external and internal events to undergo enormous transformation that raised the nation to prosperity. i.e. After Admiral Perry's entry and during the Meiji Period. The latter are just some of the measures. More important than the 'number', is the nature of them. They are pretty drastic steps for Japan. Westerners benefiting from these reforms, particularly the opportunity to live in Japan, would do well to consider how they might benefit from their 'distinctive cultural differences' in a nation which is pretty homogeneous in its thinking. After all, this is why Abe is trying to break Japan out of its comfort zone. Its happened before, and it seems to be happening again. We have patiently been waiting for it!<br />
<br />
<b>Asian property markets outperforming</b> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a> <b><a href="http://sheldonthinks.ecrater.com/p/2660019/buying-philippines-property-2-volume-ebook">Philippines Property Guide</a></b><br />
<b>Profit from mining with</b> <a href="http://miningstocks.sheldonthinks.com/">Global Mining Investing eBook</a></div>
<div>
<div style="text-align: justify;">
<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
</div>
<br />Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-80973662509221810312014-03-12T21:36:00.000-07:002014-03-31T22:32:06.945-07:00Skilled workers in Japan offered permanent residence<div style="text-align: justify;">
The Japanese government has signalled its intention to relax its <a href="http://www.immi-moj.go.jp/newimmiact_3/en/evaluate/index.html">visa requirements</a> for well-paid, foreign workers. These “high-quality human resources” (if you still feel human) will be permitted to seek permanent residence for an indefinite period in Japan. Being ‘Japan talk’ one might suspect that ‘indefinite’ is only until they decide otherwise, as you are not a citizen. It remains to be seen however whether those people will be able to secure welfare. i.e. If they lost their job, would they be given access to the welfare system, and for how long? Will they be kicked out? Of course, none of this bothers ‘high calibre’ people with flawless lives. However bureaucrats are plenty flawed, so we might expect them to make mistakes selecting applicants.<br />
The amendment of the Immigration Control Act is targeted at researchers and engineers, who will be appraised on the basis of a points system. Issues to be considered will include factors such as annual income, employment history, and the continuity of the applicants stay in Japan over the perquisite 5 year period. Certain applicants will be given preference, so they will be able to secure “permanent residence” in just two years. The successful applicants will be given the status of "No. 1 Advanced professional” or “No. 2 advanced professional”. The visa will also provide for travel by the applicant’s parents.<br />
<br />
One of the most appealing aspects of these provisions will be the prospect of workers in Japan having the flexibility to live there. I would however caution the parents of these applicants to travel around Japan as a tourist before you apply for this visa because you will lose the benefit of being a tourist - namely the Japan Rail Pass. Another appealing aspect for the applicants will be the prospect of their parents being able to freely enter Japan, and even live in Japan. This has great appeal because you can imagine that:<br />
1. Parents can live half year say in their home country like the Philippines, Thailand, China and the United States<br />
2. Children can buy a foreclosed property in the depopulated rural areas of Japan for their parents. These houses can be bought for as little as $10-15,000 when I looked.<br />
<br />
Japan is struggling to attract people into its rural areas. Might we expect a revival with liberalisation such as this under consideration. Such provisions are likely to have mixed results. We might expect people to welcome the prospect of money and development that it brings, but they might also experience a shock from the cultural clash, as elderly foreigners in Japan might be expected to bring 'stoic' ways from the old country. In any respect, it will add a dynamic to Japan's rural areas. Of course this type of living is not for everyone. But it will surely appeal to those high income 'high calibre' migrants from the developing world, who will be looking for a better life for their parents, as well as the support that only parents can provide.<br />
<br />
One of the fabulous aspects of living in this period is the new options or flexibilities that are made possible as barriers between countries dissolve.<br />
<br />
<b>Asian property markets outperforming</b> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a> <b><a href="http://sheldonthinks.ecrater.com/p/2660019/buying-philippines-property-2-volume-ebook">Philippines Property Guide</a></b><br />
<b>Profit from mining with</b> <a href="http://miningstocks.sheldonthinks.com/">Global Mining Investing eBook</a></div>
<div>
<div style="text-align: justify;">
<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
</div>
<br />Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-78659796102994112172013-09-01T19:45:00.000-07:002013-09-01T19:45:21.905-07:00Strong economic growth in the Philippines<div style="text-align: justify;">
The Philippines has just reported a healthy <a href="http://www.smh.com.au/business/world-business/philippine-economic-growth-matches-chinas-20130829-2ssn3.html">annualised growth</a> rate of 7.7%, highlighting the enormous appeal of the country as an investment destination. You might be interested in our property report - listed below. There are several appealing facets to the nation:<br />
1. Better economic management<br />
2. Prospect of settling disputes with Muslims in Mindanao<br />
3. Falling interest rates<br />
4. Strong remittances from abroad<br />
5. Strong Business Process Outsourcing<br />
6. Proximity to Asia<br />
7. English speaking, law and customs<br />
<br />
The old problems of poor infrastructure are rapidly being curtailed. The low-grade cultural experience as a reuslt of 'enfranchisement' of malls is a problem that should be erased in time as incomes and urbanisation rates rise rapidly.<br />
<br />
<b>Asian property markets outperforming</b> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a> <b><a href="http://sheldonthinks.ecrater.com/p/2660019/buying-philippines-property-2-volume-ebook">Philippines Property Guide</a></b><br />
<b>Profit from mining with</b> <a href="http://miningstocks.sheldonthinks.com/">Global Mining Investing eBook</a></div>
<div>
<div style="text-align: justify;">
<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
</div>
<br />
<br />Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-8814939689128264662013-08-20T22:45:00.001-07:002013-08-20T22:47:15.300-07:00Advantages of buying property shift from Japan to Philippines <div style="text-align: justify;">
We have long sung the praises of investing in Japan for a number of reasons:<br />
1. <b>Lifestyle, lifestyle, lifestyle</b> - Japan's conveniences and services make it one of the best places to live.<br />
2. <b>Japanese property outside cities is cheap</b>. If you are not bound by job restrictions, rural areas are surprisingly appealing and not so remote. Foreclosed property gets far cheaper in these areas because there is simply no buyers.<br />
3. <b>Attractive yields of 12%</b> make this an appealing place, though you do need to acknowledge that homes do depreciation, and earthquakes can accentuate depreciation rates. Of course the key is to identify the appealing locations.<br />
4. <b>Regional strategy</b> - There is a tendency to treat Japan as a 'single market' but its really a number of cities surrounded by rural areas that don't really matter to the nation's economy. Basically few people live there and they are 'subsistence based' retirees. They will keep doing that until they die. The point is that these areas are depopulating. The people of Niigata and Aichi, etc are however not moving so much to the city centre of Tokyo and Osaka, but mostly to the 'fringes' of these cities. This is one reason why I bought in Hanno City. In the last 8 years, this town continues to grow in population. There is a new Cainz Home Centre, a new library, a shopping centre under construction. There is a university at Motokaji (nearby), the road up the Naguri River Valley has been upgraded. In other regional centres like Masashi Ranzen, the growth is not as strong because it is 1.5 hours from Tokyo on the Tobu-Tojo Line. Hanno is just 36minutes from Ikebukuro, on Tokyo's Yamanote (green) line, and its recently been linked to the Shibuya through its connection to the <a href="http://en.wikipedia.org/wiki/Tokyo_Metro_Fukutoshin_Line">Fukutoshin Line</a>, with good connections to Shinjuku and Yokohama.<br />
<br />
The important fact is that whilst the population in Japan might be falling, the major cities are actually growing, and the dynamics of rail development is shaping where people migrate to. The implication is - investing in Tokyo and other cities is about realising where train services will be built, and how lifestyle values are shaping those moves.<br />
<br />
But this story is not 'good bye' to Japan, but hello to <a href="http://expat-philippines.blogspot.com/2013/08/gates-open-to-foreign-investment-in.html">opportunities in the Philippines</a>. Why do you need to live in one place. So many of us have the flexibility to do otherwise, or otherwise to buy investment property.<br />
<br />
<b>Asian property markets outperforming</b> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a> <b><a href="http://sheldonthinks.ecrater.com/p/2660019/buying-philippines-property-2-volume-ebook">Philippines Property Guide</a></b><br />
<b>Profit from mining with</b> <a href="http://miningstocks.sheldonthinks.com/">Global Mining Investing eBook</a></div>
<div>
<div style="text-align: justify;">
<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <b><a href="http://www.sheldonthinks.com/">www.SheldonThinks.com</a></b></div>
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<br />Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-1138269520712908952012-07-11T19:32:00.000-07:002012-07-12T17:54:43.795-07:00New working visa provisions for Japan<span style="color: #222222; font-family: arial, sans-serif; font-size: 13.333333969116211px;">For Westerners, getting a visa in Japan is a little easier in terms of the conditions of the visa. It is now possible to get a 5-year visa, with an automatic multiple re-entry....well I'm assuming that is only if you have a job, but I'm not sure about that. What I can tell you is before that many people struggled to even get a 3-year visa. I had no problem, but that might be because my first visas to Japan were sponsored by two of the largest corporations in Japan - Sumitomo Group and Mitsubishi Materials. I've spoken to Americans who've said that they were only ever given 1-year visas, and that they had to go to Immigration to update them each year.</span><br />
<span style="color: #222222; font-family: arial, sans-serif; font-size: 13.333333969116211px;">The new system will be much appreciated. Read about the revision of policy in this </span><a href="http://www.japantimes.co.jp/text/nn20120710a1.html" style="color: #1155cc; font-family: arial, sans-serif; font-size: 13.333333969116211px;" target="_blank">Japan Times</a><span style="color: #222222; font-family: arial, sans-serif; font-size: 13.333333969116211px;"> article.</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13.333333969116211px;">I fully recommend taking the opportunity to work in Japan - the most popular areas are English teaching, finance and recruitment. It is relatively hard to get a business visa. You need to set up a business, prepare a business plan, etc. Sounds reasonable, but for some the process will be too onerous.</span></div>
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<span style="color: #222222; font-family: arial, sans-serif; font-size: 13.333333969116211px;">There are other ways to stay there including study, whether for an MBA or marshall arts (under a cultural visa). Otherwise you can simply stay there <a href="http://www.mofa.go.jp/j_info/visit/visa/short/novisa.html">visa-free</a> and exit the country every 90 days. Check out the list of countries to see which provisions apply to your country.</span><br />
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<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div>
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</div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com2tag:blogger.com,1999:blog-1830657147021971416.post-9277399170130735932012-04-18T19:04:00.004-07:002012-04-18T19:10:53.268-07:00The threat of earthquakes in Tokyo, Japan<div style="text-align: justify;">Here is some <a href="http://www.japantimes.co.jp/text/nn20120419a1.html">important information</a> for people buying property in Tokyo; and in fact anyone buying property in Japan. This story highlights the risks of buying property in Japan. There is an expected risk of 10,000 fatalities for a central Tokyo magnitude 7 earthquake. The good news is that the earthquake risk is not equal; and whilst anyone can be lucky or unfortunate in a certain context (i.e. because you cannot choose your moment), you can of course improve your odds by buying in the right location. This is why I bought in Western Tokyo, and why I took it upon myself to write about the earthquake and tsunami risk in my eBook on <a href="http://www.sheldonthinks.ecrater.com/p/11307514/japan-foreclosed-property-2011-12">Japanese foreclosed property</a>. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/" style="font-size: 100%; ">NZ Property Guide</a><span style="font-size: 100%; "> </span><a href="http://philippinesrealestate.sheldonthinks.com/" style="font-size: 100%; "><b>Philippine Real Estate Guide</b></a><span style="font-size: 100%; "> </span><a href="http://foreclosedjapan.sheldonthinks.com/" style="font-size: 100%; ">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-74477358793233081222012-04-02T15:55:00.003-07:002012-05-16T05:37:45.344-07:00Japan's property - cheapest in the world<div style="text-align: justify;">
According to a recent survey, <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10796278&ref=newsl_businessnewsdirect_J20080610_113625_2167_4261_883682029">Japan has the lowest housing prices</a> in comparison to income. I encourage expatriates and Japanese people to look at the foreclosed property market because houses can be bought very cheaply through this route. I bought a 5br dormitory just 1hr train from Tokyo City Central in 2004 for just $US28,000. The nice aspect is that you can get these houses cheaply because:</div>
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1. Japanese people are so superstitious - they have this fear about ghosts and yakuza</div>
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2. Japanese people fear conflict with former tenants and landlords. I have found the contrary, that owners simply want to stay there to get cheap rent as long as they can.</div>
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3. The Japanese courts facilitate an easy buy by offering support to remove unruly landlords. I very much like the idea of buying through the courts.</div>
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4. There is a great deal of housing in Japan's depopulating rural areas. Japanese people will not commute as they love convenience....but would you buy a modern house for Y3mil just 50km from a major city? Use lateral thinking and you might even get a better buy close to an even bigger city like I did - yes Tokyo fringes for Y2.8mil ($US28,000). </div>
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<a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div>
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</div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com1tag:blogger.com,1999:blog-1830657147021971416.post-21953020248552612112012-02-29T20:34:00.005-08:002012-02-29T20:53:24.256-08:00Malaysia pursuing semi- retirement expatriate demand<div style="text-align: justify;">There are signs that there is going awareness of SE Asian governments in going after the high net worth individuals looking at retirement. Consider that if you have a $US 1million - you can retire in a place like Australia. You will of course have to place those funds into a fixed interest Treasury investment; with eventually some discretion to invest some in 'fully developed' or fully valued property, i.e. not development property.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I have long sold the benefits of the Philippines for non-millionaires. The appeal of the Philippines is that:</div><div style="text-align: justify;">1. You don't need much money</div><div style="text-align: justify;">2. You don't need a long term visa - you can stay for 18 months without ever leaving the country; and then you can just fly over to Singapore for a weekend, and some straight back.</div><div style="text-align: justify;">3. Its a cheap place to live.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The Philippine people are of course very happy to have you; and they are lovely people to a large extent. The problem though is that the cities are polluted and the rural areas are not terribly 'culturally' interesting, and way under-capitalised for the foreign expatriate with a penchant for fun and services. There are of course plenty of resorts offering some form of 'lifestyle'; though I'm sure many of you welcome a more 'cultured' setting than a beach resort. There are places which are better, i.e. Davao City, Cebu City, perhaps Baguio City or even San Fernando City in Pampanga or nearby Subic. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Some of you however might like Malaysia. The government has recently offered a program to appeal to retired persons and semi-retired persons. The appeal of the program is that:</div><div style="text-align: justify;">1. Malaysia is pitching it somewhere between the West and developing countries like the Philippines.</div><div style="text-align: justify;">2. Its a very attractive country with great food, culture, etc</div><div style="text-align: justify;">3. The real estate market is <a href="http://www.globalpropertyguide.com/Asia/Malaysia">not overly priced</a> - though not cheap either</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The problems with it is that conditions are more onerous than for the Philippines as you'd expect; and then you have to tolerate the Malaysian religious thought police. I prefer the secular thinking in the Philippines; but then I'm probably inclined to live in the West for the next 10 years until a place like the Philippines becomes more interesting. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Read more about <a href="http://www.mm2h.gov.my/conditions.php">Malaysia's My Second Home Programme</a>. Malaysians of course speak Bahasa Malay, a similar language to Indonesia's. The good news I found is that there are plenty of Indians, Chinese or kids who can speak English anywhere in the country, so you need not have a problem. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/" style="font-size: 100%; ">NZ Property Guide</a><span style="font-size: 100%; "> </span><a href="http://philippinesrealestate.sheldonthinks.com/" style="font-size: 100%; "><b>Philippine Real Estate Guide</b></a><span style="font-size: 100%; "> </span><a href="http://foreclosedjapan.sheldonthinks.com/" style="font-size: 100%; ">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-7261492408971979312012-02-12T12:43:00.000-08:002012-02-12T13:26:41.200-08:00New editions of our property reports<div style="text-align: justify;">Over the last 4 years I have prepared 4 editions of the Japan Foreclosed Property report; as well as preparing and updating similar reports for the Philippines and New Zealand. It is not my intention to continue this series of reports. Over that period I guess I have invested about 5 months of research into making the Japan editions for sales of around 300. That's $US6000. This is a stunning result for a first book, and it was not even my intent to actually write about property. Its just that I was in Japan for 3 months when I was considering writing an eBook, and of course recognising an opportunity for a very practical book. My ultimate intent was to write applied philosophy; which is the task I am embarking upon now. In the next few weeks I will launch a new website promoting these services. </div><div style="text-align: justify;">As far as Japanese, NZ and Philippines property market is concerned, I will continue to support this site with feedback from readers (i.e. tagged 'Case Studies') prepared to offer such support. I will offer as much disclosure as you contributors want; and will ask you if you are happy with the content as posted for privacy and strategic reasons. </div><div style="text-align: justify;">I will also post any topical stories I find. The feedback on these ebooks has been fantastic. Some people have rightly been critical of my spelling and grammatical errors; much better now after 4 editions. But aside from that, its almost been a zero complaints publication. So we are pleased with that. We have had heard some wonderful success stories with Japanese foreclosed property. We had a glowing appreciation from the Japanese Institute of Economics for our Philippines report. I did a lot of research for this 2-set book. The Philippines is a very hot market gives the disparity in West-East wages for the next 20 years; plus the 2% population growth and rapid urbanisation. Watch as new cities are built around Manila and regional airports are opened up to foreign (Chinese, Japanese, Korean) tourists. The Philippines already has among the most liberal immigration requirements in the world - you can stay there 18months before requiring to leave. More importantly, the Philippines government is starting to adopt some semblance of zoning as we see greater compliance with the law. So expect this to add to property prices; as well as result in more attractive development. </div><div style="text-align: justify;">My biggest surprise with these books is probably the lack of interest of English teachers in buying Japanese foreclosed property. This is probably because most of them are 'lifestyle junkies' with no intent to stay in Japan, or maybe it speaks to their 'liberal' not-so-aspirational goals, or lack of savings. In any respect, I envisaged more of them buying foreclosed properties and turning their homes or offices into teaching schools. Most buyers have been expatriates in Asia or Japan; even fund managers and investment consultant-types. </div><div style="text-align: justify;">Anyway, the opportunities in these countries are not over. I will continue to provide limited support for this and related blogs, however the property publishing is probably over unless I can farm the activity out to someone else. I know people who have become multi-millionaires buying foreclosed property, to the stage of buying entire residential apartment blocks and renting them off or selling them to students. I think I have listed such opportunities in this blog, i.e. A love hotel in Hokkaido comes to mind, decked out in 1970s decor. Very tacky! The Japanese student would probably love it. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/" style="font-size: 100%; ">NZ Property Guide</a><span style="font-size: 100%; "> </span><a href="http://philippinesrealestate.sheldonthinks.com/" style="font-size: 100%; "><b>Philippine Real Estate Guide</b></a><span style="font-size: 100%; "> </span><a href="http://foreclosedjapan.sheldonthinks.com/" style="font-size: 100%; ">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-28710927098492861932012-01-05T12:53:00.000-08:002012-01-05T13:22:34.258-08:00Strategies for buying property close to stations<div style="text-align: justify;">In my book on buying foreclosed property in Japan I raise a number of strategies for buying property in Japan. This story in the <a href="http://www.japantimes.co.jp/text/nn20120105a2.html">Japan Times</a> highlights the application of one such strategy when buying property. The East Japan Railway Co is building a new railway station between Shinagawa and Tamachi stations. This type of 'infilling' will become more common, so its a good idea to identify the locations in which this is likely to occur and to buy property in those locations. The sites to look at are in areas where subways might be extended or new stations added. The principle guiding your decision-making will be:</div><div style="text-align: justify;">1. Local minimum population density - look at neighbouring areas</div><div style="text-align: justify;">2. Distance between train stations - look for anomalies</div><div style="text-align: justify;">3. Explanation for anomalies - why is there no station there? Topographic anomaly so no settlement; perhaps a park, etc.</div><div style="text-align: justify;">4. Growing population density - historical evidence that the area is growing in population. High rise developments, new stores like HokkaHokkaTai and McDonalds, etc are good signs to look for, but you can also look at Japan's very good population statistics. They offer you monthly changes in demographics.</div><div style="text-align: justify;">5. Space for growth - stations need to be supported by near-station development. It is harder to develop a station if the railway company cannot build some type of shopping precinct to service it.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">This approach can work on outer city lines or inner city lines. Of course, our intent is to be close, but not too close to such a development. We want to live close to amenities, the railway station. There is a big periphery around a likely site, and this raises your prospects of buying such a property as a foreclosure. You will find it hard to get such a property in Kanagawa, but not in Saitama. If we are going with this model, we are buying the foreclosed property to 'hold' as a rental property as we want to profit from anticipated future development. After a proposed new station is announced, you can expect property prices to double...as your property, which might be 7km from a railway station, might now be 3km away. Clearly we do best if we buy close to an existing line, but not too close. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">This strategy can be applied to both land leases and freehold properties, as long as you are able to get an extension on your land lease. <a href="http://www.japantimes.co.jp/text/nn20120105a2.html">Read more</a> about the nature of this development, as it will give you an idea of the dynamics of this approach.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-9779932439564210212012-01-02T19:16:00.000-08:002012-01-02T19:41:24.064-08:00Muslim rebels deserve fair consideration<div style="text-align: justify;">Living in the Philippines, you often here expatriates say that there is no risk living on the southern island of Mindanao. There are even those self-righteous souls who live in some of the more dangerous parts of the island. The reality however is that 'self-righteousness' can be very risky as human qualities go. </div><div style="text-align: justify;">In this article, <a href="http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10776454&ref=newsl_afternoonnewsdirect_J20080609_142008_1716_1129_825738151">an Australian</a>, <span style="background-color: rgb(255, 255, 255); font-family: 'Lucida Sans Unicode', 'Lucida Grande', Arial, sans-serif; font-size: 13px; line-height: 18px; text-align: left; "> </span><span style="background-color: rgb(255, 255, 255); line-height: 18px; text-align: left; "><span >Warren Rodwell, 53yo</span></span><span style="background-color: rgb(255, 255, 255); font-family: 'Lucida Sans Unicode', 'Lucida Grande', Arial, sans-serif; font-size: 13px; line-height: 18px; text-align: left; ">, </span>is the latest person to be held captive by some Muslim rebel group. He is probably an expat of no consequence to anyone but those who know and love him. To the abductors he is worth just P1 million ($20,000). </div><div style="text-align: justify;">In a certain context, we might argue that it is highly unfair or unethical for these Muslim rebels to resort to such measures. The reality however is that Rodwell's (Australian) government has effectively sanctioned the terrorists. We might ask what is an appropriate measure for a group of people to do when they are marginalised by their political system. Muslim people of Mindanao lived an autonomous, independent life on the southern island of Mindanao for centuries until the Spanish-American influence sought to resettle people from the more densely-populated northern & central islands to the south. This culminated, under democracy, in the marginalisation of the Islamic people, and their consequent disempowerment and loss of identity under "Catholic" policy. That's democracy you say! Well, this is just one of the problems with democracy. Extortion! Statutory law makes it possible for governments to use democracy for the purposes of extortion. Now whilst extortion is allowed under arbitrary statutory law, there is a common law tradition of extortion being illegal. Sadly, a fairly good tradition of common law has been trumped by arbitrary statute law in the West, and thus the Philippines. </div><div style="text-align: justify;">Democracy is a system of extortion which imposes upon people the values of the majority on the basis of some arbitrary jurisdictional boundary. At this time, the boundary was sanctioned by the power of the Spanish, and sanctioned I guess you could argue by politically-allign Spanish colonists and the Catholic-supported Philippine government of the north. The Americans had a part in the resettlement as well, with the US-inspired Homestead Act, which saw large estates broken into 20-hectare losts for resettlers. </div><div style="text-align: justify;">I personally think every effort should be made to negotiate a fair settlement with these people, with full recognition and empathy for their right to autonomy, and possibly sovereignty, given the existence of an independent Muslim state nearby. Personally, I'd prefer to see the Philippines become a federation of states, or a pan-ASEAN nation established along the likes of Europe with a common currency. Maybe this is the future, but the breaking down of trade barriers is likely to see this happen anyway. </div><div style="text-align: justify;">I return to my original point. Filipinos are generally the most affable people. If they resort to extortion - its generally for good reason. In this case, whether we discuss the NPA or Muslim extremists, it is fair to say they are fighting extortion with extortion. Their marginalisation under democracy has been an act of extortion far grander in scale than anything they have perpetrated. For this reason, I hope the authorities give them due regard in these peace negotiations. I do not however expect it. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">I will be the first to concede that there are Muslim terrorists with illegitimate interests in the world. The reality is that most of them are illiterate. I am not. These particular Muslims have a legitimate grievance against the Philippines (and arguably the American and Australian) governments for initiating, or otherwise sanctioning or tacitly endorsing the acts of their military forces. </div><div style="text-align: justify;">Read more of my posts and you will readily see that democracy is not the only alternative to autocratic tyranny; its just a proxy for a representative's extortion. There is not a single form of democracy. Representative democracy is not really a form of democracy; its an extortion racket. You want democracy; then the only legitimate form for a nation-state is a 'meritocratic' democracy, where reason is the standard of value.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-21321421015734700132011-12-28T17:55:00.000-08:002011-12-28T18:08:57.257-08:00Is the DPJ doomed? Not just yet.<div style="text-align: justify;">I get the sense that Japan is looking at another substantive shift in its political game; though nothing transformational to be sure, at least not at this point. Some 9 members of the Democratic Party of Japan (DPJ) have resigned as a result of the party's decision to increase the GST (consumption tax) to 10%.</div><div style="text-align: justify;">I totally agree with their position. There is no question that the Japanese government needs to raise taxes to pay off its 'internal' debts, but taxing consumption is not the way to proceed. It ought to be taxing assets - most particularly land. Probably the best approach would be to totally cut off funding for the provincial governments and allow them to raise local government rates. This would offer some form of competitive pressure, as well as make these governments independently accountable. </div><div style="text-align: justify;">It looks like we might be looking at a 'no confidence' motion in the Japanese PM, and thus a new election...unless a new political leader emerges. I'd say we might be looking at a return to the alternate party.</div><div style="text-align: justify;">It must however be acknowledged that this could be considered 'posturing' by local party members trying to save face in their local electorates. i.e. Essentially such posturing entails playing musical chairs or erecting Chinese walls, where you resign from one party, set up another, and pretty well function as an pseudo-independent faction. How long can this go on? Well, musical chairs can go on for a long time if you keep changing political candidates at every election. Good luck with that game!</div><div style="text-align: justify;">See the latest news at <a href="http://www.japantimes.co.jp/text/nn20111229a1.html">Japan Times</a>.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-51207687992040583142011-12-25T12:39:00.001-08:002011-12-25T12:46:57.672-08:00Japan public finances still bad<div style="text-align: justify;">This <a href="http://www.japantimes.co.jp/text/nn20111225a1.html">article</a> in the Japan Times highlights the treacherous state of public finances - in this case in Japan. Whilst on the face of it, Japan's budget deficit might look worse than Europe's, Japan is in a far better position because:</div><div style="text-align: justify;">1. Japan has greater income earning capacity</div><div style="text-align: justify;">2. Japan's debt is owed to Japanese citizens and corporations, which can taxed at higher rates, i.e. The government retains the power. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The positive news is that the Japanese government has actually managed to stabilise spending. The negative of course is that economic activity is not growing either. Expect Japanese interest rates to remain low for a long time. The flipside is that the Japan's government is between a rock and a hard place; they will soon have to do something about:</div><div style="text-align: justify;">1. Raising taxes</div><div style="text-align: justify;">2. Cutting spending</div><div style="text-align: justify;">The disparity between local and international costs of capital preclude borrowing abroad.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Read more at the Japan Times <a href="http://www.japantimes.co.jp/text/nn20111225a1.html">website</a>.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-32109159403945722802011-10-01T15:55:00.000-07:002011-10-01T16:07:12.953-07:00Buying property in the USA<div style="text-align: justify;"><b>Comment by <a href="http://injapan.gaijinpot.com/2011/02/16/how-to-make-money-on-property-in-tokyo/">Bring the pain</a>:</b></div><blockquote style="text-align: justify;">"There are plenty of countries offering 8% - do some research. Rest of the world in a bear market - obviously you are a Sepo and think the whole world (America) is in a bear market. American property is in a bear market because you have a retarded financial and banking system flow on effects include high unemployment, low GDP and unsustainable housing market due to dodgy loans. Bear markets are the best time to buy in a business cycle you moron. Having an asset depreciate in value means you lose money benny boy; get a grip on your economics. Again, the quality of housing in Japan is shocking. Who wants to live in a rabbit cage made out of plasterboard. Good luck getting 12% for a 1dk piece of rubish, good luck keeping the piece of rubish standing for more than 2 years. Rather buy a house in Swedan, houses made out of brick, stable banking system, and no earthquakes. If you want to lose money in Japan buy an investment property".</blockquote><div style="text-align: justify;">This is not a response to anything I wrote - but its worth answering. It is true that there are countries offering more than 8% yield. Unfortunately, they are outside of my area of interest because it does not make sense as an individual to have property in too many countries because I'd need to employ staff to manage them. </div><div style="text-align: justify;">It is a gross generalisation to say that the US market is 'over-priced', as there are many areas in the USA where the affordability index is 2-3, compared to cities where it can be as high as 10x annual income. The trick then is to find those areas which offer a reasonable balance between lifestyle values and affordability, or reliable rental income and adequate yield, if that is important. Good online marketing can make the difference as well.</div><div style="text-align: justify;">It is true that Japanese properties do depreciate rapidly; but that's why you buy property which is old, say 10-12 years old, thus 60% depreciated, and its more than offset by a 12-13% yield. This is most particularly the case in Japan where you can get a local loan and the ability to leverage your investment. The reality is that many people want to live in Japan, and for good reason. Personally, I did not by there for the yield, I bought for the lifestyle. But I was happy to help my ex-Japanese GF get a property from which she gets a 13% yield - its paid off now. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-33804028444942195092011-10-01T15:47:00.000-07:002011-10-01T15:54:35.448-07:00Why buy property in Japan?<div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Comment by <b><a href="http://injapan.gaijinpot.com/2011/02/16/how-to-make-money-on-property-in-tokyo/">The real expert</a></b>:</div><div style="text-align: justify;"><blockquote>Why would I invest in something that has no capital appreciation? Instead of property investing with an unrealistic target of a 12% yield (never heard of a 5 million unit in north Tokyo), why wouldn't I put that cash into a fixed 8% term deposit? No risk and a guaranteed 8% return on investment, no maintenance headaches, no government red tape headaches, no flood headaches, no housing bubble headaches etc etc. Investing in the Tokyo real estate market would have to be the worst investment decision ever. If you buy a house in Western countries you will get appreciation on your investment, i.e the value of your house will go up unlike Japan where prices go down. Erik your article is total rubish and people should never buy houses in Japan for investment purposes.</blockquote></div><div style="text-align: justify;">The reason is because capital appreciate is just one issue - rent expense substitution or rental yield, depending on your perspective is the other issue. There is typically an inverse relationship between the two, i.e High capital appreciation or high yield. That is why Japanese yields are high. If you can find some structural distortion being corrected then you can get both, i.e. Say the Philippines today because it has 8% yield and good capital appreciation. i.e. There is the realisation that Asian labour is rising in cost, so even low-productivity Filipinos start looking appealing as a source of labour; most particularly because they make satisfactory call centre agents. This market does not rely upon the low-productivity ports in the Philippines. These issues will gradually be resolved, and the Philippines will be more broadly an appealing property market. </div><div style="text-align: justify;">Japan only makes sense if you are buying a rural lifestyle property, an inner city land rental purchase of house, or suburban house for rent substitution; and even this might only make sense if you are earning Japanese income and planning to live there over 4 years. Since people love Japan, and 'hope' to live there, this can make a lot of sense.</div></div><div style="text-align: justify;">The other issue is inflation and currency depreciation, which I have alluded to above. Bonds paying 8% in Japan? Unlikely - more likely 1% and paid is debased Japanese yen. The USD is also being debased, so need an bond indexed to inflation. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com1tag:blogger.com,1999:blog-1830657147021971416.post-31322105109455740442011-10-01T15:06:00.000-07:002011-10-01T15:33:43.379-07:00Living and working abroad<div style="text-align: justify;">There are obstacles to living abroad. But you know, its not as hard as you might think to live and work abroad if you are able to develop relationships in these countries or find forms of work that suit you. In my 'wonderings' I have come across people who find work abroad by doing different things. Consider the following:</div><div style="text-align: justify;">1. <b>Selling:</b> I write books about buying property. Such book publishing allow me to live anywhere in the world because my store front is online. </div><div style="text-align: justify;">2. <b>Consulting </b>is another activity that allows you to work anywhere in the world if you deal with your clients online.</div><div style="text-align: justify;">3. <b>Strategic career opportunities:</b> There are certain jobs like doctors, nurses and teachers who are in strong demand around the world if you have decent qualifications.</div><div style="text-align: justify;">4. <b>Service jobs</b> like teaching English, builders, trades jobs and tattoo artistry are also jobs that you can find if you travel. Generally though in these cases you need to tap into the informal economy, but consider this: In a large city like Tokyo, you can be sure there is a need for computer support services for all the English expatriates living there, because there are thousands there looking for a good deal who are getting ripped off because they don't speak Japanese, or have support. In such cases, forums offer support for most, but forums only offer limited support.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">Different countries have different rules for staying in the country. i.e. Consider that the Philippines probably has the most liberal immigration laws. You can stay there 18 months before having to leave the country, but you pay around $30/month to extend your visa. Other than that, they care less what you do. In Japan, its a 90-day tourist visa, and hard otherwise to get a business or working visa unless you are sponsored. Having said that, you can fly to China or Korea every 90 days (3mths) if that suits you, or you can commute from another place and just stay the 90 days in gaijin houses (i.e. Short stay accommodation). </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The intention of this strategy is to buy accommodation in different countries at the low-end of the market so that I can live a flexible and interesting life as a tourist. This is why a $28,000 dormitory in Japan appeals, with a $300/year rates bill, a $US55,000 house in a depopulating NZ regional city, rates a little pricey at $1700/year, or you can go a house in much of the USA for $80-120K. We also have a place and land in the Philippines. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">This is truly a period of great flexibility thanks to technology. I would not equate this however with freedom. No country recognises your personal sovereignty, and no government functions on the basis of rationality as the standard of value. Under democratic tyranny of the 'populist' majority, we spread our assets widely. This is why grasslands are so prevalent. Their spores are basically blowing around the world. We like to travel light in a world of arbitrary government. Yes, that might sound a little tragic, but living a life of slavery to some over-priced, statutorily or artificially priced house is crazy. I don't own a house in Australia, my home country because with the average house costing 11.6x the average income in Sydney, I think I should be living in Japan, NZ or USA, where I can live in a decent place for 2-3 times earnings. Personally, I wish people would think so we can end this tyranny, but since we have a system of wealth extortion based on 'universal ignorance and passivity', I prefer to travel. If you are wondering where this ends up, it is either:</div><div style="text-align: justify;">1. <b>A life of repression</b> - Japan is the model we are drifting towards - where you are all zombies entertained by mindless concrete, frivolities like alcohol, sex, etc. </div><div style="text-align: justify;">2. <b>A intellectual life</b> - A form of meritocracy which does not yet exist, where economies grow at 16% per annum because they are not constrained by centralised government; which are not overtly materialistic because the people's intellectual sovereignty has been oppressed. In a world where ideas matter because there is a free market for them, as opposed to the statutorily regulated 'parliament' which has political parties act as gatekeepers. But you go on pretending you live in free countries because you are given some pretense of it. More on this matter at our <a href="http://polly-rage.blogspot.com/">politics blog</a>.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-67679728599328210562011-10-01T15:04:00.000-07:002011-10-01T15:05:59.277-07:00Japan - why rent property when you could buy?<div><div style="text-align: justify;">Just a recommendation for anyone who thinks they will be living a long time in Japan; whether because:</div><div style="text-align: justify;">1. They have a good job</div><div style="text-align: justify;">2. They love the place</div><div style="text-align: justify;">3. They are married to, or intend to marry a Japanese partner</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">You might want to consider saving yourself a great deal of rent expense by buying a home. Google 'buying foreclosed property in Japan" for more info, but some basic advice:</div><div style="text-align: justify;">1. The Japanese prefectural law courts are tendering the sale of discounted properties way below market prices</div><div style="text-align: justify;">2. The yields on Japanese property can be so high that renting is crazy. For instance, I paid just Y2.8mil for a 5br dormitory on 400m2 of land at Hanno, west of Tokyo. Its just 1hour from Ikebukuro, and I always get a seat on the train (Y420). There are better properties for less in depopulated rural areas.</div><div style="text-align: justify;">3. Buy a house & land in suburbs to avoid apartment management fees, which are usually a rip-off.</div><div style="text-align: justify;">4. Buy an old house with land lease if you insist upon living in the central city areas because the land rent can be extraordinarily low.</div><div style="text-align: justify;">5. If you intend to stay more than 4 years in Japan, it would make more sense to buy there; particularly if you are earning yen, as all the major currencies are being debased.</div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The appeal of foreclosed property is that its a huge market; the Japanese investor is generally ignorant and risk-averse. The educated elite in Japan are more interested in office and residential complexes, not in managing houses, so you are really competing against real estate agents and home handymen who have limited resources. </div></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-1830657147021971416.post-17282958538191944122011-09-26T20:34:00.000-07:002011-09-26T20:49:51.100-07:00The morality of buying foreclosed property<div style="text-align: justify;"><b><span class="Apple-style-span" ></span></b><blockquote><span class="Apple-style-span" ><b>Question:</b> "I'm interested in buying foreclosed property, but isn't it making money out of someone else's misfortune".</span></blockquote></div><div><div style="text-align: justify;">I don't regard buying foreclosed property as making money from others misfortune; that is what governments do. They create the recessions and structural imbalances through their monopoly over the use of coercion. A power they use to distort rather than to protect. It is not the responsibility of a buyer to protect the interests of the seller. If the seller thought they were going to get a better price, they would not sell. If they subjugated their rights to sell their property in case of default, then they made inadequate provisions to protect themselves, nor to understand the market into which they bought. If you buy property from a distressed seller, and encounter some angst from them, it would be nice to be able to communicate your empathy to them. Aside from that, you can only regale them of the hazard of government arbitrary power. They should direct their anger towards their nearest federal government. Market participants merely act within the law, the problem is 'arbitrary law' created by governments which distort markets and in the process place participants in a position of unnecessary vulnerability. </div></div><div style="text-align: justify;">If you want to know more on the flaws of government; we do a great deal of writing on that issue on our <a href="http://polly-rage.blogspot.com/">politics blog</a>. Nope, I'm not a conservative or a liberal; though I understand your confusion. That's how people lose money on property. </div><div style="text-align: justify;">It is true that the Japanese system of selling favours the buyer in several respect, but again that is because of government, or silly Japanese suspicions about yakuza. The reality is that many foreclosed properties sell close to market price in the inner city areas. In the rural areas, they sell at huge discounts because of embarrassment and depopulation. Should buyers stop buying in these areas? No, that would reduce the dollar price recovered, and the banks would probably benefit anyway. In any case, its a market, which entails buyers and sellers taking advantage, or so they think, at the expense of others. There is a greater issue of responsibility here. </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://nzproperty.sheldonthinks.com/">NZ Property Guide</a> <a href="http://philippinesrealestate.sheldonthinks.com/"><b>Philippine Real Estate Guide</b></a> <a href="http://foreclosedjapan.sheldonthinks.com/">Japan Foreclosed Guide</a></div><div style="text-align: justify;"><a href="http://foreclosedjapan.sheldonthinks.com/"></a><b>Author Andrew Sheldon</b>| <a href="http://www.sheldonthinks.com/">Applied Critical Thinking</a> | <a href="http://www.sheldonthinks.com/"><b>www.SheldonThinks.com</b></a></div><div><blockquote></blockquote></div>Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0