By Brian Madigan LL.B.
Japan which happens to be the world's second-largest economy is now in a recession.
Japan's economy decreased by 0.1 percent in the third quarter of this year. And the way things work, that was just enough to do it and make it official. So, the media should be quite happy now, obviously there is something to talk about.
This one tenth of one percent follows a 0.9 percent drop in the second quarter. That makes two consecutive down quarters and that’s all it takes.
Maybe we should change the definition to three in a row, or perhaps we might even say that the second of the two down quarters has to be worse than the first. After all, if you looked at it rationally, you might be tempted to think that one tenth of one percent was pretty good. And, it was a whole lot better than the previous quarter.
Also, so much for a trading range. That type of thinking is completely “passe”. Now one wants to hear anything like that.
The trading range theory would conclude simply that things aren’t too bad. They go up and down a little bit, but they stay in a normal range. You might think that would be a good thing. But, no, that’s not good! The economy must increase every quarter. If it doesn’t increase every quarter, then there’s an economic problem. No time for rest periods. If it goes down, then that’s obviously bad and the economy is under the watchful eye of the economists. And, if it goes down two quarters in a row, then that would be a “recession”.
You may have thought that we would be having recessions all the time, every few months. But, this is the first recession in Japan since 2001.
That’s a lot of TV’s. I thought most people had one by now. Just a little pressure off the economic engine in Japan should be OK. Apparently not! What if people bought a whole lot of TV’s next year?
Europe officially fell into recession last week. Again, something for the media to talk about.
The Japanese Yen has been a good perfomer recently. It was viewed as a safe haven by investors. Because Japan is a major exporter of consumer goods worldwide a stronger Yen is not good news for its economy.
The Japanese stock market Index has lost 42% of its value since the beginning of the year. During the same time, the US market declined about 35%.
One thing for sure: there will be no real estate recovery until we start listening to some good news on TV.
I think we need new media, or at least some media who can see the bright side of things. Also, we need new economists. What good were the old ones? They certainly didn’t predict anything!
Also, we need a new definition of recession; one that says a one tenth of one percent decline is pretty good under all the circumstances.
Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
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www.OntarioRealEstateSource.com
