Japanese politics is stranger than fiction sometimes. There's always too much drama and never enough substance to chart a course out of the troubled waters it finds itself in. Still, the ruling DPJ has managed to change Prime Minsters for the second time in this Diet term and installed Yoshihiko Noda, a man better known for not being the front runner in this leadership challenge.
THERE is not a lot that instantly stands out about Yoshihiko Noda, who was chosen in an internal ruling-party election on August 29th to become Japan’s seventh prime minister in only five years. But at least two things can be said for him before he is dismissed as yet another here-today, gone-tomorrow face in some G8 summit's photo: he has a healthy sense of crisis, and a nicely self-deprecating sense of humour.
In mid-August, he wrote a blog post (sorry, Japanese only), referring extensively to our cover story of July 30th, “Turning Japanese”, which is about debt and politics in the West. As Japan’s finance minister, he could have focused on the debt issue alone, but instead he chose to translate—and echo—our lament about Japan’s long-standing political paralysis. “I feel very keenly the eyes of the foreign media on our country. And I think a lot of Japanese people feel that things are not working the way they should.” He added, “When the time comes, I will put myself forward.”
At the time, some people would have shuddered at the thought that such a little known politician—and one closely aligned with that bureaucratic powerhouse, the ministry of finance—might replace the woefully uncharismatic Naoto Kan. But there is at least one thing to be thankful for in today’s victory: Mr Noda sidelined one of the main forces of paralysis in the ruling Democratic Party of Japan (DPJ), Ichiro Ozawa, who continues to head the largest faction within the party though he has been indicted in a money scandal and his party membership is suspended.
Mr Ozawa backed Banri Kaieda, a trade minister who looked increasingly in danger of becoming a puppet for the backroom fixer. But though the first vote put Mr Kaieda in front, thanks to the support of Mr Ozawa’s cronies, it was not enough to win him an outright victory. In the run-off, Mr Noda’s supporters joined forces with those of Seiji Maehara, another anti-Ozawa candidate who lost in the first round (and whom we had thought would be the front-runner, because of his support among the electorate at large). Mr Noda won with 215 votes to Mr Kaieda’s 177. It is the second time this year—the first was a no-confidence vote against Mr Kan in June—that Mr Ozawa has failed to impose his will on the party, though that is not to say that he will stop making mischief for the new leader.
The long and short of it is that they couldn't go back to Maehara, and they didn't want the puppet of Ozawa, so they made the gutsy move of picking a guy who might actually have some stones. Mind you, stones wasn't the issue with Kan - it was more his inability to actually govern - while Hatoyama before him was essentially child-like in the wrong way. It will be interesting to see if Noda has any ability at all.
The more interesting aspect of his career to date is that he always wanted to be a politician so there's something of a motivated bastard in him; meanwhile he's not coming from a dynastic line of diet members like so many in the Japanese Diet so it is possible he might have a different perspective on what actually is the task for a member of the Diet. We shall see. The best thing about him so far as I can tell is that he reads the Economist magazine and so understands how the West view Japan today; and he is shocked. it shows that he understands the enormity of the problem and its urgencies. It might turn out he's the right man at the right time. That was most certainly not the case for Kan, Hatoyama, Aso, Fukuda, Abe and the latter part of the Koizumi years.
For once, they have a Prime Minister who understands the nature of the problem, and how far-reaching it is.
Those House Prices...
Don't look now but Steven Keen's actually been spot on about housing prices. In a nutshell, they're falling.
Although auction clearance rates have been relatively stable over the past few months, Australian Property Monitors data reveals Sydney's median house price fell from $646,806 over the April quarter this year to $639,484 over the July quarter, a decrease of 1.1 per cent.
The other capital cities also recorded declines in median house prices over the July quarter. Melbourne was the best performer with a fall of 0.9 per cent, and Perth and Brisbane the worst, with falls of 2.7 per cent and 2.1 per cent respectively.
Perth and Brisbane were the worst performing capitals over the July quarter with falls in median house prices of 2.7 percent and 2.1 percent.
Despite the decline over the July quarter, Sydney's median house price has remained steady over the past year - down just 0.6 per cent. This is good for stability and confidence, considering prices rose 20 per cent in the 18 months from January 2009 to June 2010.
Sydney has recorded the best outcome among capital cities through the market's recent corrective phase brought on by rising interest rates and house prices that put pressure on affordability in most centres.
So, Sydney isn't getting more affordable any time soon, but the asset bubble that is the property market is slowly deflating. You'd have to say the RBA is doing a bang up ob of managing the economy. Mind you, this slow decline and stagnation in property value is going to motivate the property-owning class to vote out the ALP at the next Federal election but really, even if the Libs were in power these prices were going to fall.
Building Approvals are also not recovering.
On an annual basis, approvals fell 15 per cent in the year to July, following a 15.5 per cent drop in the year to June. Analysts predicted a 12.4 per cent fall in the month.
"These were a little weaker than we expected," said Macquarie economist Ben Dinte. "It comes off a period of consistently falling building approvals so it's really just stabilisation at pretty soft levels rather than an indication of things picking up."
Taken with weak home loan data, building approvals will probably remain flat over the rest of 2011, said Mr Dinte.
The real estate market has shown signs of strain this year, posing risks for employment growth in construction and as well as bank earnings in the months ahead.
Data yesterday showed that new home sales have fallen to a 10-year low in July, according to the Housing Industry Association, dropping 8 per cent in July, following an 8.7 per cent fall in June.
Home prices, on a seasonally adjusted basis, have sunk 2.7 per cent in 2011 so far, according to RP-Data-Rismark, after rapid run-ups since 2008, making the purchase of property less attractive.
That's got to be joy too. Given the volatility of the share markets lately, and the stagnation in property prices, Gold has soared because there's not that many other places that are safe to put your money. The truth might be that there is actually nowhere you can put your money that is 'safe'. Think about just how much bad debts there were in 2008. It dwarfed the GDP of the world.
Rickenbacker Restoration
Sorry I've not written for a little while I've been mightily distracted by things around me and haven't been the most inspired when it comes to writing stuff down.
My current project of sorts is an attempt to restore a vintage Rickenbacker 4001 bass dating from about 1980. I was originally going to work on assembling a new bass this half year leading up to Christmas but one thing led to another and I decided upon restoring a Ricky instead. Part of it is that I've always wanted a Rickenbacker 4001 bass because all my bass-playing heroes played one - Chris Squire, Paul McCartney, John Entiwstle each spent significant parts of their careers with one - so as long as I can remember I've just wanted one.
Of course in Australia this is a lot more difficult. They not only cost more, and for better parts f the last 3 decades the Australian dollar was at a significant disadvantage to the US dollar, but also the suppliers in Australia have had a devil of a time getting a supply of product from America. This has led to an absolute scarceness of Rickenbacker basses in Australia and fueled resale prices.It was simply rare to see anybody playing with one at all. And they all had collector-bound price tags. If ever there was a hall mark of Australian rock, you could say it was the utter absence of the Rickenbacker bass sound.
It's a nice thing that you can now buy Rickenbackers on-line. Of course being a little idiosyncratic, I picked a second hand 4001 that's been painted silver grey and discovered that most of the parts need replacing. So I've been spending my free time sanding back the paint and trying to get my head around the Rickenbacker circuit diagram. It's been quite a voyage of discovery as I've learnt things about something for which I only had a distant appreciation. In the process I feel like I'm exorcising ghosts and cutting away Karma from the instrument.
I expect this project to take a little while yet so I might be sporadic in my posts here.
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