Tuesday, May 15, 2012

Japan's Sovereign Debt Situation in 4 Charts

Move over, Greece.

From Zero Hedge (5/15/2012):

Sovereign debt to GDP: Japan is the only country over 200%, and set to go higher after the March 11, 2011 triple disaster.

Sovereign debt interest payment to government revenues: Japan is the only country over 20%.

Japan's sovereign debt to GDP ratio, since 1980: 45-degree angle since early 1990s, after the real estate bubble burst.

Sovereign debt to government revenues: Japan looks to be about 1,900%. Greece comes in second, with about 400%.

Zero Hedge cites the source as: Harvard Business School, 9-212-091, Hayman Capital Management


Anonymous said...

Yes, but isn't the debt mostly to itself?

arevamirpal::laprimavera said...

Long-term debt - foreign holders increasing from 5% to 8% (particularly China and Korea)

Short-term debt - foreign holders doubled to 20% in the last decade.

Sovereign CDS rising rapidly.

Enough professional foreign investors (Wall Street bond vigilantes) getting involved to demand higher yield.

All it takes would be for the interest on 10-year bond to rise by 1%.

See this article from Fortune: http://finance.fortune.cnn.com/2012/02/16/is-japan-next/

Anonymous said...

Why is everybody focusing so much on Spain right now? It looks to be OK based on those charts.

STeVe the JeW said...

perhaps Bono will do the right thing and include Japan in his debt forgiveness petitions.

arevamirpal::laprimavera said...

Particularly the last chart, Japan skews so much it should be expressed in log.

Spain's banks are in really bad shape, after the burst of real estate bubble. On top of bad loans, now they are gobbling up Spanish government bonds.

Anonymous said...

Sad to say, but since the defeat in WWII, Japan has been a proxy of the US system of debt (except that they've gone even deeper).

If it was up to the Japanese people alone, things would assuredly be better. Japan needs to declare real independence from the USA.

Anonymous said...

It's only a matter of time before Japan hits the wall. TBH I'm looking forward to the day when civil servants won't get what they think they're going to get. After all they designed this mess and did sweet FA all their working lives. Complacent gets. When the pension funds stop buying debt the game is up. The governmernt will be forced to compete in the open market. Interest rates will rise like no tomorrow and inflation will take off like nothing before. Then there is the delicate problem of affording energy resources, namely liquid oil. Throw in the allergy we all have for nuclear power and consider a much weakened Yen and you have our predicament in a nutshell. Not forgetting the crushing depopulation/deflation thesis that exists in real time...and 30,000+ suicides per year. Nikkei to sub 4000 anyone?
Roll with it. Hail the new paradigm. Print those yen notes now...

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