- Britain’s deficit swelled to the largest since World War II and unemployment rose to the highest in 12 years. (Bloomberg)
“The natural flights of the human mind are not from pleasure to pleasure but from hope to hope.”
FX Trading – Hope springs eternal
Japan reported its first annual trade deficit in 28 years. But today’s Bloomberg headline regarding the release of recent exports numbers from Japan gave us this:
Japan Exports Slide Slows in Sign Recession May Ease
So you read the story to see how much improvement, and you get this [our emphasis]:
April 22 (Bloomberg) — Japan’s export slump slowed in March, ending a four-month streak of record drops and adding to signs the recession may have started to ease.
Overseas shipments slumped 45.6 percent from a year earlier, compared with February’s unprecedented 49.4 percent plunge, the Finance Ministry said today in Tokyo. Economists predicted a 46.4 percent drop.
Wow! Exports only fell 45.6% from a year earlier! Let’s stand up and cheer. Japan’s recession must be ending soon.
But it doesn’t seem that way when you read the top business story in The Japanese Times today [our emphasis]:
GDP outlook to be revised to 3% contraction
In a rare move, Japan plans to slash its initial projection for real gross domestic product to around minus 3 percent for fiscal 2009 in light of the global economic slump, government sources said Tuesday.
In December, the government projected zero growth for the year that began April 1. But now it is expecting a large contraction because of the damage the US recession is inflicting on Japan’s export-based economy, the sources said.
But there is hope! The great red hope–China. Exports to China fell only 31.5% in March compared with a year earlier, compared to a 39.7% decline in February and one of 45.2% in January, the BBC reported.
Couple of points here: 1) Odd that news about these magnitudes of decline in exports with slight improvements can generate so much seeming optimism (does this strike you as the prudent man seeking rationality or the desperate man grabbing on to a thin reed of hope?), and 2) In almost every story we see concerning the global economy and the “green shoots” of rebound, hope that China will pull everybody’s rear-end out of the fire abounds.
US imports fell $109 billion in the first two months of this year–Mr. US Consumer ain’t buying. If the bleeding of the US job market doesn’t stop, it is unlikely Mr. Consumer will go out and shop.
And if Mr. C doesn’t shop, these massive export declines will likely continue for Japan and China and Singapore and South Korea and Taiwan and Germany and …
Hope springs eternal.