QF26 Haneda -> Sydney. 6am. Portside sunrise.
QF26 Haneda -> Sydney. 6am. Portside sunrise.
Cherry blossoms in full bloom today at Niikurayama Asama Koen in Fujiyoshida, Yamanashi, 120km west of Tokyo.
With a population crisis like Japan has, one would hopefully encourage couples to be active to mitigate the problem. A private daycare company in Aichi Pref has lambasted one of the staff for getting pregnant before her turn! While we’ve heard of seniority based systems for remuneration, it is unbelievable to think that a company allowed staff to set up a pregnancy roster. The real downside would be if the couple before your turn had issues conceiving. In any event the insanity of such a policy shows how not even one’s private life choices are respected by some.
Some will say I am a pessimist. I’d prefer to be called an optimist with experience. At only age 16 (in 1987) I realized the destructive power financial markets had on the family home. Those memories were etched permanently. We weren’t homeless or singing for our supper but things sure weren’t like they use to be. It taught me much about risk and thinking all points of view rather than blindly following the crowd. That just because you were told something by authority it didn’t mean it was necessarily true. It was to critically assess everthing without question.
In 1999, as an industrials analyst in Europe during the raging tech bubble, we were as popular as a kick in the teeth. We were ignored for being old economy. That our stocks deserved to trade at deep discounts to the ‘new economy’ tech companies, no thanks to our relatively poor asset turnover and tepid growth rates. The truest sign of the impending collapse of the tech bubble actually came from sell-side tech analysts quitting their grossly overpaid investment bank salaries for optically eye-watering stock options at the very tech corporations they rated. So engrossed in the untold riches that awaited them they abandoned their judgement and ended up holding worthless scrip. Just like the people who bought a house at the peak of the bubble telling others at a dinner party how they got in ‘early’ and the boom was ahead of them, not behind.
It was so blindingly obvious that the tech bubble would collapse. Every five seconds a 21 year old with a computer had somehow found some internet miracle for a service we never knew we needed. The IPO gravy train was insane. One of my biggest clients said that he was seeing 5 new IPO opportunities every single day for months on end. Mobile phone retailers like Hikari Tsushin in Japan were trading at such ridiculous valuations that the CEO at the time lost himself in the euphoria and printed gold coin chocolates with ‘Target market cap: Y100 trillion.’ The train wreck was inevitable. Greed was a forgone conclusion.
So the tech bubble collapsed under the weight of reality which started the most reckless central bank policy prescriptions ever. Supposedly learning from the mistakes of the post bubble collapse in Japan, then Fed Chairman Alan Greenspan turned on the free money spigots. Instead of allowing the free market to adjust and cauterize the systemic imbalances, he threw caution to the wind and poured gasoline on a raging fire. Programs like ‘Keep America Rolling’ which tried to reboot the auto industry meant cheaper and longer lease loans kept sucking consumption forward. That has been the problem. We’ve been living at the expense of the future for nigh on two decades.
Back in 2001, many laughed me out of court for arguing Greenspan would go down in history as one of the most hated central bankers. At the time prevailing sentiment indeed made me look completely stupid. How could I, a stockbroker, know more than Alan Greenspan? It was not a matter of relative educations between me and the Fed Chairman, rather seeing clearly he was playing god with financial markets. The Congressional Banking Committee hung off his every word like giddy teenagers with a crush on a pop idol. Ron Paul once set on Greenspan during one of the testimonies only to have the rest of the committee turn on him for embarrassing the newly knighted ‘Maestro.’ It was nauseating to watch. Times seemed too good so how dare Paul question a central bank chief who openly said, “I know you think you understand what you thought I said but I’m not sure you realize that what you heard is not what I meant.”
We all remember the horrors of the collapse of Lehman Brothers and the ensuing Global Financial Crisis (GFC) in September 2008. The nuclear implosions in credit markets had already begun well before this as mortgage defaults screamed. The 7 years of binge investment since the tech bubble collapse meant we never cleansed the wounds. We would undoubtedly be in far better shape had we taken the pain. Yet confusing products like CDOs and CDSs wound their way into the investment portfolios of local country towns in Australia. The punch bowl had duped even local hicks to think they were with the times as any other savvy investor. To turn that on its head, such was the snow job that people who had no business being involved in such investment products were dealing in it.
So Wall St was bailed out by Main St. Yet instead of learning the lessons of the tech bubble collapse and GFC our authorities doubled down on the madness that led to these problems in the first place. Central banks launched QE programs to buy toxic garbage and lower interest rates to get us dragging forward even more consumption. The printing presses were on full speed. Yet what have we bought?
Now we have exchange traded funds (ETFs). Super simple to understand products. While one needed a Field’s Medal in Mathematics to understand the calculations of a CDO or CDS, the ETF is child’s play. Sadly that will only create complacency. We have not really had a chance to see how robots trade in a proper downturn. ETFs follow markets, not lead them. So if the market sells off, the ETF is rapidly trying to keep up. Studies done on ETFs (especially leveraged products) in bear markets shows how they amplify market reactions not mitigate them. So expect to see robots add to the calamity.
Since GFC we’ve had the worst post recession recovery in history. We have asset bubbles in bonds, stocks and property. The Obama Administration doubled the debt pile of the previous 43 presidents in 8 years. Much of it was raised on a short term basis. This year alone, $1.5 trillion must be refinanced. A total of $8.4 trillion must be refinanced inside the next 4 years. That excludes the funding required for current budget deficits which are growing despite a ‘growing economy’. That excludes the corporate refinancing schedule. Many companies went out of their way to laden the balance sheet in cheap debt. In the process the average corporate credit rating is at its worst levels in a decade. Which means in a market where credit markets are starting to price risk accordingly we also face a Fed openly saying it is tapering its balance sheet and the Chinese and Japanese looking to cut back on US Treasury purchases. Bond spreads like Libor-OIS are already reflecting that pain.
Then there is the tapped out consumer. Unemployment maybe at record lows, yet real wage growth does not appear to be keeping up. The number of people holding down more than one job continues to rebound. The quality of employment is terrible. Poverty continues to remain stubbornly high. There are still three times as many people on food stamps in the US than a decade ago – 41 million people. Public pension unfunded liabilities total $9 trillion. Credit card delinquencies at the sub prime end of town are back at pre-crisis levels. We could go on and on. Things are terrible out there. Should we be in the least bit surprised that Trump won? Such is the plight of the silent majority, still delinquent after a decade. No wonder Roseanne appeals to so many.
A funny comment was sent by a dyed-in-the-wool Democrat, lambasting Trump on his trade policies. He criticized the fact that America had sold its soul for offshoring for decades. Indeed it had but queried that maybe he should be praising Trump for trying to reverse that tide, despite being so late to the party. Where were the other administrations trying to defend America all this time? Stunned silence.
Yet the trends are ominous. If we go back to the tech bubble IPO-a-thon example. We now have crowd funding and crypto currencies. To date we had 190 odd currencies to trade. Of that maybe a handful were liquid – $US, GBP, JPY, $A, Euro etc – yet we are presented with 1,000s of crypto currency choices. Apart from the numerous breaches, blow ups and cyber thefts to date, more and more of these ‘coins’ are awaiting the next fool to gamble away more in the hope of making a quick buck. Cryptos are backed by nothing other than greed. Yet it sort of proves that more believe that they are falling behind enough such they’re prepared to gamble on the biggest lottery in town. One crypto used Wikipedia as a source for its prospectus.
Yet the media remains engrossed on trying to prove whether the president had sex with a porn star a decade ago, genderless bathrooms, bashing the NRA, pushing for laws to curtail free speech, promoting climate change and covering up crime rather than look at reporting on what truly matters – the biggest financial collapse facing us in 90 years.
There is no ‘told you so’ in any of this. The same feelings in the bones of some 30 years ago are back as they were at the time of Greenspan and Lehman. This time can’t be avoided. We have borrowed too much, saved too little and all the while blissfully ignored the warning signs. The faith and confidence in authorities is evaporating. The failed experiment started by Greenspan is coming home to roost. This will be far worse than 1929. Take that to the bank, if it is still in operation because you won’t be concerned about the return on your money but the return of it!
Ducati Panigale V4S
The absolute star of the 2018 Tokyo Motorcycle Show was the Ducati Panigale V4S. 214hp, 174kg. It not only raises the game but doubles down. Completely customizable bike which has basically bombed the goalposts of what is technically possible. It is a Ferrari La Ferrari on two wheels.
KTM 790 Adventure
Austrian makes KTM has effectively made a Paris-Dakar bike with a bigger motor and light weight. It should totally devour trails versus the competition.
Both Vitpilen and Svartpilen models should sell like well in Japan. Compact size, well appointed and funky Swedish design even though it is built in Austria.
BMW 850GS Adventure
BMW has a problem in Japan. It has seen some of its older riders find that the R1200GS is too much to handle as they age so some switching to the 310GS. This should be a good half way house. Lighter and more powerful with well appointed LCD screen.
Triumph has really got its act together. Properly decent bike range with unique product which Harley should be copying. Harley has been struggling in Japan because it I s stuck in the 70s when it should be going back to the 1930s-40s like the Bobber.
Harley FatBob 114
Almost 2000cc gives ridiculous torque. A sensible departure from the current range which suffers from the divine franchise. It looks like it is a decent replacement for the V-Rod but they neeed a proper Bobber bike. The Japanese don’t seem to like it.
Actually this is the #1 selling big-bore bike in Japan. It harks back to the 1970s when the Z-1000 was king. A modern day interpretation of a classic. Sold out in Japan til next year. Amazing to see how many custom shops were playing with this bike. Best of the Japanese.
Honda finally showing it has a pulse. It may make 18 million bikes a year but it has a deadly dull product range. The CB has modernized a classic. Not quite a Kawasaki Z900 but it is something that should sell equally well. I’ve never wanted a Honda but this is something worth considering. 140hp motor.
Essentiallyba quirky 3-wheeler with a bomb in it. It won’t be for purists but it takes the maker down a unique path. Yamaha will sell a lot of these to bikers who are coming back to it now the kids have left home. It’s a safe alternative.
Two bikes that should be built:
BMW R-32 Heritage
Two years ago CM told BMW Motorrad management that the K1600 Bagger was a waste of time. If people want a cruiser they’ll opt for a Harley, Indian or Honda Gold Wing
It was an excuse to find a chassis for the 6-cylinder motor. Nothing else. That’s never a good reason. It is a technical tour de force with a million buttons which press none where it matters. However the success they’ve had with the RNineT is admirable Still a modern day version of the R-32 is what it must produce for the purists. It would be special. Does it have the guts? The K1600 should be made into an S with 200hp+
Suzuki invented the racer replica market in 1987. A mint 30yr old GSX-R750 sells at a premium to a brand new one today. The current GSX-R gets rave reviews but it has no unique qualities that sets it apart from its competition. CM’s suggestion is to encase it like above. The people in their 40s who can afford it would fall over backwards to buy the poster on they once had on their wall as a teen. CM did. Suzuki toyed with the concept in 2015 with the GSX 1200 but it was a half-baked job with a pokey 100hp. A retro GSX-R1000 will crush it and revive a brand that has seen its sales halve inside a decade.
There is something to be said of the left when it comes to compassion. For all of the sanctimony of how we must do our bit for social justice and fight to stop every -ism in the world, whites need not apply. It shouldn’t have escaped many that certain “white” South African farmers are fleeing persecution while their land is being confiscated. Murders, beatings of men and women, children having their faces given the “joker’s cut” with razor blades. It’s truly horrific. Yet some are prepared to cynically fire off “the poor whites…”
Yet because of their skin colour some on the left deem their “white privilege” should be checked first. It would seem in order to restore justice, white South African farmers should get a taste of their own medicine after the oppression of apartheid some 30+ years ago. Surely people in need are indeed just that – in need. Are all white farmers guilty of apartheid? Back of the line. Sacrifice your lives for the sake of equality.
Australia is often beaten over the head for its asylum seeker policies. That somehow asylum seekers kept in detention centres (where they demand Hyatt 5-star services and amenities) awaiting processing on Manus Island got a raw deal as ‘fellow whites’ get a fast pass. What the media, like The Guardian often fail to do is report the balance. Immigration Minister Dutton fast tracked the visas of 700 Yazidi women who had escaped ISIS rape gangs. They aren’t white. They were in grave danger. Instead of congratulations it wasn’t reported.
On the flip side 12 Iranians had their visas revoked by Dutton’s office for lying in their applications. They had pleaded they were fleeing persecution in Iran yet the first thing they did on receipt of visas was to fly back to the very danger zone they had escaped for a holiday. Was that racist policy or one that is simply preventing visa fraud to ensure integrity in the immigration system?
Asylum seeker policy is a touchy subject. How Angela Merkel was praised for her social caring programme by granting a come one come all refugee policy, one which ended up being the mother of all misguided altruism. Instead of helping the truly needy, the EU tallied that 80% were economic migrants seeking better fortunes in the West. That’s right 80% weren’t fleeing war zones.
Since she started her benevolence, Merkel gagged the media, muzzled the police and silenced those that spoke out about the cover up of the deterioration in public safety, rapes and crime which even now Merkel admits has led to the creation of no go zones which never existed before. She’s now paying for refugees to leave with generous incentives. Yet where is the left’s media outrage? Why not just admit it was a dreadfully executed policy which cost her the worst election result for her party in 70 years and gave the anti-immigrant AfD the second largest following in Germany from nowhere?
Then the folly is extended to the EU which then tried to cover up for Merkel by enforcing migrant quotas like they were cattle. Asylum seekers were mostly making a B-line to Germany yet the EU in its infinite wisdom thought all members had a duty to take a share. If they truly spared a thought for asylum seekers, why would any wish to be allocated to countries like Hungary that held a referendum on the topic and got a 98.4% response against having them? Not a promising starting point. Then we sit back and wonder why the Italians voted for anti-immigrant, eurosceptic parties? Or why the UK voted Brexit? Or why the Austrians also voted in a government that put a right wing anti-immigration party in charge of immigration? Or The Netherlands? Poland? Hungary? The list goes on.
Yet the media focuses on a drowning 3 year-old boy on a shoreline and tried to shame our collective lack of compassion. Still the media refused to focus on the billion dollar illegal people smuggling industry that lured so many who weren’t fleeing persecution to their deaths. That poor little Aylan Kurdi died, not because he and his family were fleeing to safety (they already had been for 3 years in Turkey) but that his life was put at risk without a life jacket in a flimsy vessel for the sake of his father’s own dental treatment.
Why not beat Gulf states over the head for not doing their bit? The Saudis can accommodate 3 million, chair the UN Human Rights Council yet refuse to step up and the media stays silent. Why not smash up Japan for letting in low double digit numbers of asylum seekers? Is it a coincidence that the 98% homogeneous society has such low crime rates, social harmony and safety record the envy of the world? It is not to say that foreigners commit most of the crime in Japan because they don’t (per head of population they do) but Japan is not prepared to throw its culture out the window to get with the times on doing its bit for humanity. Japan would prefer to throw billions in foreign aid to fix the problem at source.
The better narrative is to pick on the West. Shame our white privilege. Mock our colonialist past and tell South African farmers to go to hell.
Compassion for the truly needy should only depend on the danger faced. Skin colour, religion, sexual orientation or any other identity based criteria should be irrelevant. People who are desperately fleeing for their lives should fall over themselves to willingly respect the rules of their new house. They should be only too happy to repay the generosity of those that provide safety and strive to become model citizens. Many Vietnamese fleeing the ravages or the Vietnam War have paid back our support in spades.
Yet too often those who have not escaped persecution end up being the ones that expect society to bend to their culture not the other way around. Our authorities and judiciaries are becoming self annointed justice warriors often turning a blind eye to crime by meting out lenient sentences for armed robbery, rape, child grooming, assault and manslaughter with paltry community service orders. Take this example. Ibrahim Kamara, from Sierra Leone, received a suspended sentence of just over one year, with an 18-month good behaviour order, after admitting to five counts, including grooming and having sex with a minor. The ACT Supreme Court judge said “(Kamara) has tried to make a good start on his life in Australia”. Or last week a Sudanese woman, Ayou Deng, was given 80 hours community service for running over and killing a 13yo boy in a car she was driving unlicensed. What message is being sent to the people that we would hope want to integrate in the great Aussie way of life? Do what you please as the worst you’ll get is a slap on the wrist.
Then should we criticize Australia’s asylum seeker policy when we ask for the recipients of asylum visas to sign a code of conduct order which explicitly tells them that rape and sexual harassment of women and children is not accepted? Surely civilized society shouldn’t need to have to force new arrivals to sign a document for common decency but apparently they do. Clearly the immigration department saw it as a requirement supposedly to stem the tide of countless incidents before it was introduced. Then again Canada is trying to remove female genital mutilation from its new citizen’s code of conduct for fear it might offend. You can’t make this stuff up.
So to the left that wants to selectively administer asylum seeker policy based on prejudices. In the quest for diversity they should check their own hypocrisy before asking white South African farmers to check their privilege as they cry for genuine grounds for asylum. The true colours of the left are exposed for what they are. Institutionalized diversity folks is anything but. No one wins acceptance by denying their own identity,