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Jerome, I hesitate to question you here, as my understanding of these issues is completely based on pop economics and folk Japanology, but I have always been under the impression that, at least in the case of Japan vis-a-vis the U.S., the policy of accumulating capital surpluses was quite intentional (on the part of Japan), and it was the U.S. that became the beneficiary of Japanese hyper-industriousness and monomania about building up foreign reserves.

Chronologically speaking, what came first: the emergence of U.S. policies that enabled/facilitated Japanese policies, or the other way around?

Truth unfolds in time through a communal process.

by marco on Thu Oct 9th, 2008 at 06:48:21 AM EST
If you look at the graph I posted in the comment above, you can see that Japan's surplus has been stable throughout the period, so their behavior was predictable in that respect and did not create new imbalances (I need to think about whether the permanent, if stable, surpluses are enough on their own to cause problems).

I'd respond, in a first attempt, that there was something substantially new in Western policies in the past 10 years, and that did not come from Japan (although they may have been part of the problem with their ultra-low interest rates in that period).

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 07:20:02 AM EST
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Following the problems in the sub-prime lending market in America and the run on Northern Rock in the UK, uncertainty has now hit Japan. In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches. Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song while today trading of shares in Kamikaze Bank were suspended after they nose-dived.

While Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black. Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal.

PS - I just heard that the Bank of Iceland has had its assets frozen!




In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 08:25:41 AM EST
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Um, is that The Onion?

Origami has folded, Sumo has gone belly up, Bonsai has cut its brances, Karaoke will go for a song and Kamikaze has nosedived?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 08:29:24 AM EST
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It seems at least a year old and is reported on some many websites that it is impossible (or rather very tedious) to figure out where it originated.

BBC NEWS | Talk about Newsnight | Friday, 19 October, 2007

And finally Newsnight viewer Chris Mills sent in this Joke fit for an eleven year old:
"The knock on from the recent US sub prime market problems, that hit Northern Rock among others, shows no signs of letting up. In fact it has now badly affected the banking system in Japan. In the last 7 days the Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank plans to cutback some of its branches....."

and so on
by someone (s0me1smail(a)gmail(d)com) on Thu Oct 9th, 2008 at 08:44:21 AM EST
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