US Markets - Five Points
US markets are holding record highs without much to point at.
What matters this week? The NFP on Friday, 20% of the S&P reports earnings, and Asia has Golden Week to look forward to.
$6 gas prices in California are an indictment of the state, not a talking point.
What should be off the table for comedians like Kimmel or Rogan to joke about? Nothing.
A couple of days ago, I saw a Wall Street guy talking on his phone in front of really loud jackhammers and other roadwork, and I thought, Why would he stand in front of that terrible noise? It dawned on me later what an excellent way to say screw you to the other person on the call.
Since I don’t feel like writing much and am still thinking about our Japan trip, an excerpt from Three Body Capital’s weekly email. Well worth subscribing:
I can safely say that the legends about the Japanese are true: for a country with declining demographics and an economy that has literally gone sideways for more than 30 years, Japan has done an amazing job of keeping things running impeccably.
Sure, it has its share of corporate scandals and social peculiarities, and it’s far from perfect. But the mentality of the Japanese people, that unspoken pride in everything that they do, no matter how small, shows in everything about the country: from the clean, orderly streets, to the décor in restaurants regardless of size, to how hotels somehow think about every little detail in advance (even those you never even thought to think about – such as free rental pyjamas), to how nothing is too small for innovation and quality, from the famous Japanese toilets to the Shinkansen to wet paper serviettes in restaurants that are stronger than cloth despite being one-use. The British may have used to be known to have a stiff upper lip – no longer. It is probably the Japanese who deserve that honour now.
That said, the demographic challenges that face the country are real, and we’re constantly reminded that outside of the major metropolitan areas, rural Japan is depopulating fast. Population shrinkage at -0.5% a year annually since 2011 is further exacerbated by an economy that’s structured around a depreciating Yen. Japan’s conglomerates are considered blue-chip around the world, from the automakers to the banks to high-tech semiconductors and machinery, and of course, they have Softbank which one often forgets is also a local telco. But their success is almost dependent on the decades-long Yen carry trade, the net effect of which is sustained financial repression of the domestic economy. The average Japanese income is around $30k USD a year, but considering about half goes to housing and a quarter to tax, that’s not much left to go around. Couple that with Japan’s trademark stoicism and it’s no surprise that the Japanese have terms for “death from overwork” (過労死) and “suicide due to overwork” (過労自殺) – the meanings obvious in themselves for those who can read chinese. Some say that Japan is a preview of what is coming for the declining West – if Japan’s a preview, that’s good news given the way things are going!
For Japan though, it seems something’s changing, at least on the margin. The current Japanese PM Sanae Takaichi, Japan’s first female PM, has been vocally nationalistic and hawkish, at least more so than her LDP predecessors. I’m a complete ignoramus when it comes to the complex world of Japanese politics but as with the point above about Japanese pride in what they do, it is refreshing to see a people be proud of their history and heritage rather than try and water it down to blend into the ambiguity of a “global citizenry”. We come to Japan to experience a Japanese way of life, business, food and culture – not to see what we’re familiar with, just in a different location on the planet. They should be proud of being Japanese in its entirety, and most certainly shouldn’t be shamed into giving any bit of it up.
On a side note, I don’t know if this is the same tissue we came across but I was told about this patent filed in 2019 by a Japanese paper company that made tissue paper with wet tensile strength (i.e. how much can you stretch it without breaking) equivalent to fibreglass filament tape or conductive metal tape (e.g. Hi-bond). Who in the world invents soft yet industrial strength one-use tissue paper as a serviette for use before/after a meal and patents it? The Japanese.
