Category Archives: Japan

Treasury Liquidity Freakout: Searching for a Market-Maker

As someone old enough to have done finance in the ~~Paleolithic~~ pre-personal computer era (yes, I did financial analysis using a calculator and green accountant’s ledger paper as a newbie associate at Goldman), investor expectations that market liquidity should ever and always be there seem bizarre, as well as ahistorical. Yet over the past month or two, there has been an unseemly amount of hand-wringing about liquidity in the bond market, both corporate bonds, and today, in a Financial Times story we’ll use as a point of departure, Treasuries.

These concerns appear to be prompted by worries about what happens if (as in when) bond investors get freaked out by the Fed finally signaling it is really, no really, now serious about tightening and many rush for the exits at once. The taper tantrum of summer 2013 was a not-pretty early warning and the central bank quickly lost nerve. The worry is that there might be other complicating events, like geopolitical concerns, that will impede the Fed’s efforts at soothing rattled nerves, or worse, that the bond market will gap down before the Fed can intercede (as if investors have a right to orderly price moves!).

Let’s provide some context to make sense of these pleas for ever-on liquidity.

What Makes Japan Bother With the TransPacific Partnership?

Yves here. We’ve been giving regular updates, with the considerable help of our man in Japan Clive, on how the the prospects for Japan signing up for the TransPacific Partnership look extremely slim. Mind you, “extremely slim” is not impossible, but the reason we deem the probability to be that low is that the Administration appears unwilling to bargain at all, let alone offer Japan some critical and large concessions that it requires to sign up. And since Japan is a linchpin to the entire deal, if Japan is a no-go, you can kiss the TransPacific Partnership goodbye.

These TransPacific Partnership discussions have also given yours truly, and even more so our real expert Clive, the opportunity to do some cross-cultural translating, which I personally enjoy. The Japanese are a sufficiently alien culture that you are forced to suspend or retrain your assumptions about how things work. So to watch the US Trade Representative, which along with the State Department, ought to be a US agency particularly attuned to how Japan needs special handling, instead do the equivalent of repeatedly step on a rake and get smacked in the face, is entertaining in a perverse way. How can they NOT know that what they are doing is counterproductive? And how can they NOT course correct when it should be obvious that what they are doing isn’t working?

However, even though, as we have discussed, the USTR has acted in a way almost guaranteed to offend the Japanese, the government has reasons for being cool on the TransPacific Partnership yet having to feign otherwise. And they aren’t terribly mysterious either, even though they do vary with US baseline assumptions.

Xi Upstages Obama, Puts Another Nail in TransPacific Partnership Coffin

In the wake of the Republican trouncing of the feckless Democrats in the midterm elections, there’s been an upsurge of calls of alarm on both the right and the left that the Administration and its big business allies in both parties will try to push the toxic trade deal known as the TransPacific Partnership through. That is in part due to Administration messaging that the talks are gaining momentum, as Obama asserted a mere two days ago. But not only do the negotiations appear to be going nowhere, but the Administration appears to be losing clout in the region as China is playing a considerably shrewder trade and investment game.

Will US Browbeating of Japan Revive the Zombified TransPacific Partnership?

As readers may recall, we declared the toxic, national-sovereignty-gutting, misnamed “trade” deal called the TransPacific Partnership to be dead based on America’s colossal mishandling of Japan (not that it has handled the other prospective signatories any better, mind you). The pact was designed to be an “everybody but China” grouping, a centerpiece of Obama’s pivot to Asia. Japan’s participation is essential to meeting that objective, as well as to another critical objective: that of getting major nations to sign up to agreements that subordinated national regulations to the profit-making rights of foreign investors, who could sue governments over any incursions in secretive, conflicted arbitration panels.

Nevertheless, meetings on the TransPacific Partnership continue, with the latest round in Sydney last week. The US press is depicting the Japanese as bad guys who can be browbeaten into giving up protecting their beef and rice farmers, among others. Is that likely to happen?

Japanese Prime Minister Abe Vows to Conclude TransPacific Partnership by Year End. Should We Worry?

Last week, I came across an article in Japan Times which gave the impression that the TransPacific Partnership was being revived from the dead. From the article:

Prime Minister Shinzo Abe has a “strong intention” to conclude the Trans-Pacific Partnership talks by the end of the year, TPP minister Akira Amari said Friday as the U.S. pork lobby pressured Japan to make concessions, but added that the free trade deal cannot be struck without a commitment from all sides.

But is this a real commitment, or mere Japanese conflict-avoidance?

Did Japan’s Prime Minister Abe Serve Obama Beefsteak-Flavored Revenge for US Trade Representative Froman’s TPP Rudeness?

Yves here. I trust you’ll enjoy this long-form account of how President Obama put his foot in mouth and chewed in front of Japan’s Prime Minister Abe when he merely thought he was eating steak.

Are Administration Claims of Progress on TransPacific Partnership Negotiations in Japan Credible?

As readers may know, the mislabeled trade deal known as the TransPacific Partnership hasn’t looked like it has great odds of being consummated. But the Administration has been browbeating Japan, and has also been talking of breakthroughs in negotiations. Has the dynamic changed?

USTR Froman’s Attack on Japan Set TransPacific Partnership Negotiations Back Further

In case you missed it, on Wednesday the US Trade Representative Michael Froman attacked Japan in front of Congress for undermining the TransPacific Partnership via refusing to give much ground on protection of its agricultural sector. So how are the Japanese responding to this US sniping?

Even the Chinese Can Tell the TransPacific Partnership is Unlikely to Get Done

You know it’s bad when parties who aren’t at the negotiating table can tell a deal is going pear-shaped.

Is Japan Playing Ball with the US on the TransPacific Partnership?

Earlier this week, the Nikkei Asian Review published At odds with US, Japan reaches out to other TPP partners. The title would lead you to believe Japan is working with other countries to strengthen opposition to the toxic, mislabeled trade deal known as the TransPacific Partnership.

The text of the article suggests otherwise, that Japan’s prime minister Abe will feel compelled to offer some concessions when Obama visits next month. On the surface, that would represent a significant shift.

Japan to US: You Can’t Railroad the Trans-Pacific Partnership

By Clive, a regular Naked Capitalism commenter and self-confessed Japan-o-phile

The headline, in a one liner, is what this article is saying. You may have to take my word for it if you’re not a Japanese reader, but read on to find out why I hope you can.

Your Humble Blogger Discusses the Pending Trade Deals and JP Morgan on Le Show!

I really enjoy speaking with Harry Shearer, both for his engaging manner and his thorough preparation. I also hope you’ll see fit to circulate this interview, since the more attention we can bring to this plan to legalize corporate pillage, the better.

Will China’s Gambit to Undermine the Trans-Pacific Partnership Succeed?

While eyes in the US have remained focused on the budget cliffhanger in Washington, in Bali, two sets of meetings were taking place. The first was the latest set of Trans-Pacific Partnership negotiations. The US, led by John Kerry (Obama was supposed to make an appearance but the budget drama kept him away) met with representatives of the 12 nations it is pressing to agree to this deliberately mis-branded “trade deal”. The reason the label is misleading is that trade is already substantially liberalized; the real point of the TPP and its cousin, the pending EU-US trade agreement, is to weaken the power of nations to regulate, which will allow multinationals to lead a race to the bottom on product and environmental safety.

Fukushima Problems Escalating, Radioactive Water Going into Pacific

The Fukushima nuclear plant crisis continues unresolved in a bad way.

Wolf Richter: “Who Could Trust Such A Company?” – The Big Fat Lies About Radiation Exposure Of Workers At Fukushima

Yves here. This post is yet another reminder of how most companies’ first line of defense when they have engaged in seriously bad conduct is to lie, no matter how flagrant the lie is. Recall during British Petroleum’s Deepwater Horizon crisis when the oil producer repeatedly and grossly misrepresented the flow rate from its out-of-control well.