Continuing from Tuesday, the following
articles have been published over the past 48 hours that I think
worthwhile to bring to your attention:
· 'Economists React: If Worst Happens in
Japan, All Bets Are Off' - reading time 3 minutes. This
article sets out the current views of nine economists. I
think of particular interest are comments made with respect to (1)
likely replacement of lost nuclear power capacity by thermal coal,
natural gas, and petroleum products, (2) that the four areas most
affected by the earthquakes account for 6% - 7% of the overall Japanese
economy, (3) that Japanese tourism will likely be affected for months,
and (4) rebuilding could increase world oil prices;
· 'Aftershocks from Japan' - reading
time 3 minutes. This article discusses the potential
spillover effects on the rest of Asia and major world economies as
viewed by its author. I found some of the comments related
to which countries are said to have the largest export exposure to
Japan (Australia, Philippines and Indonesia) and countries who export
comparatively smaller percentages of their total exports to Japan
(China, the U.S.) interesting. That said, as I read it,
the more important message set out in the article is how the Japanese
situation 'boxes the rest of us into an even tighter corner' or, as I
think about it, how the Japanese situation makes an already fragile
world economy even more fragile; and,
· 'Fukushima Dai-ishi status and potential
outcomes' - reading time 5 minutes. This
article provides a current (I think perhaps 2 - 3 hour old) update, and
suggestions as to possible outcome related to the ongoing nuclear
issues, including commentary on the water-bombing attempts made in the
past few hours that I am sure you likely have seen in the media
coverage. My view of that water-bombing activity is that
it must be being done out of desperation, and things must be
degenerating. While the author of the article doesn't
relate the water-bombing to 'degeneration', he does say that it seems
"like an act of desperation".
Like many people, I am increasingly
focusing on what might be some of the 'specifics' of the macro-economic
consequences of the Japanese earthquake in both the near and longer
term. I plan to include my current thoughts on that
subject in tomorrow's e-mail.