Many in the news media are predicting a "seismic" change in the way the country and government function. But this may be premature hype. The losing party, the LDP, while having forfeited control of the legislature, will still wield immense influence by virtue of being in power for so long. The power elite, the interrelated connections and networks wont just change overnight. Many in government positions, probably many at Japan's central bank, owe their place at least partly to LDP influence. These relationships don't just disappear in a puff of smoke. Though I'm sure the DPJ wishes they would.
Also the only thing I've read about the DPJ leader, whose party won the election, is that he is a university professor. Well it's nice to know he has some brains, but does he know how to do compromises and backroom deals so he can get anything done. As my father told me as a young teenager concerning politics - "Nobody's going to do anything unless there's something in it for them" His point was that in any government, especially a democracy, you're not going to get any laws passed, any reforms etc, unless there's a consensus and benefit to the interests affected. According to him, some times this means allowing graft, though within reason. But all the time it depends on getting those necessary people with political power together and cutting an agreement that will stick.
I think the LDP lost the legislature one other time after 1980. But the short term coalition that took over floundered and folded within twelve months. I don't pretend to be an expert on Japanese politics, and my memory could be incorrect. Also be aware of the fact that parties opposing the LDP have been formed, disappeared, or merged with other parties over the past 50+ years. Again, if I recall correctly, the DPJ is less than five years old.
Japan is in a terrible situation. The unemployment rate only reflects the tip of an iceberg of woes. Everyone over 50 is now scarred stiff about losing their pensions. There has been a big influx of immigrants and a significant rise in crime, both factors being not a coincidence according to many Japanese. In the past most Japanese simply threw away worn shoes or torn clothes. Now they mend them. The rate of homeless is increasing dramatically by Japanese standards. The middle income / class, once almost entirely Japan, is shrinking. There has been talk of doing away with government provided health care and letting individuals fend more for themselves.
Sounds like the Untied States.
Early Western news media reports indicated the Japanese yen and stock markets are going up after the election. As I now write, which is 03:16 UTC, both are going down. Which is really not surprising since the DPJ's supposed solution to the current problem is to spend their way out of it. Ah, now where have we heard that before.
During the week, there will be talk < in fact there already has been talk > about this being a golden time to buy Japanese stocks. Perhaps so. But usually the safest and best time to invest in something is when everybody, and I mean everybody, tells you they would never touch it. I think with whatever good news this election is supposed to be, it is already priced in the markets. I for one am not touching Japanese stocks at this time.
But what you do with your money is your own decision. I don't propose to be an expert on anything connected with Japan, and therefore would not have the temerity to suggest what anyone else should do. Just be sure that the "advice" you follow does.
Keep in mind that over the years since 1991, one of the latest being by one famous fund manager last September, there have been suggested many golden times to buy Japanese stocks.
The promise never materialized.
0 comments:
Post a Comment
Thanks for the comment.