By the clock, Japan is twelve hours ahead of the US, By the numbers, it is entering a recession. By most estimates, Japan still has the No. 2 economy in the world based on GDP, and that economy is going to hell in a hand basket.
According to Reuters, "The Japanese economy shrank in the second quarter at its fastest pace since the last recession in 2001." To a very large extent, consumer confidence is to blame.
While the fall-off in GDP in Japan may be happening a little earlier than in the US, it has all of the hallmarks of the downturn here, with the exception of an extremely deep credit crisis. That factor, such a critical part of the American economy, will lever the trouble here down more. In that way, Japan has had some good fortune it the midst of it misery.
Word is that the economy in Hong Kong also slowed sharply in the last quarter. The same is probably true with China, although much of the vote is still out.
One thing is almost certain now. The oppressive combination of high oil and commodities and uneven employment is taking its toll across the globe, which means there is no winch to pull the big economies out of the mud.
Douglas A. McIntyre
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