* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>A weekly roundup of news & information from Terrie Lloyd.<br>(<a href="http://www.terrie.com">http://www.terrie.com</a>)<br><br>General Edition Sunday, October 21, 2012, Issue No. 683<br>
<br>+++ INDEX<br><br>- What's New -- Record Low Bankruptcies -- Calm Before the <br>Storm?<br>- News -- Tanaka resigns over Yakuza ties<br>- Upcoming Events<br>- Corrections/Feedback<br>- Travel Picks -- Sagami-ko Illumination, Tokyo Shitamachi<br>
- News Credits<br><br>SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br><br>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br>
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PBXL Managed Cisco Voice--because PBXL is Business <br>Communications<br>-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-<br><br>+++ WHAT'S NEW<br><br>A strange thing is happening in the Japanese business <br>
world. Even as small- and medium-sized enterprises (SMEs) <br>are under increasing pressure from a shrinking economy to <br>downsize and to globalize, or otherwise go under, in actual<br>fact the number of bankruptcies is now at a 19-year low. <br>
Indeed, over the last 3 months, the trend of fewer <br>bankruptcies is gathering momentum and under normal <br>circumstances one might might be forgiven for thinking that<br>the economy is recovering. <br><br>For example, for the month of September, 931 companies with<br>
debts of JPY10m or more went under, according to Tokyo <br>Shoko Research. In August the number was 957, the lowest <br>number for an August since 1992. So at this rate, about <br>12,000 companies will go out of business with total debts <br>
of JPY1.8trn. To help you with your math, that is an <br>average of JPY1.5bn per company -- although the reality is <br>that most of the losses would have been incurred by the top<br>5% of failures.<br><br>So what gives? Well, we don't think the numbers are <br>
anything to be sanguine about. Rather, our take is that the<br>banks are putting through the last round of payment<br>deferment agreements before closing off the spigot next <br>year and sending the bad loans on to the government. Come <br>
next April, the numbers of companies going under will start<br>to rise again, beginning with those who don't just need <br>deferred loan repayments but need fresh debt as well. <br><br>You'll recall that in 2009, the then banking and postal <br>
services minister, Shizuka Kamei, ram-rodded through <br>legislation that provided a bank loan repayments moratorium<br>to SMEs for 3 years. Then in 2011, the moratorium was <br>extended until March 2013. At this stage there doesn't seem<br>
to be an intention to further extend it. <br><br>No one seems to have up-to-date numbers on how many <br>companies have successfully applied for these loan repayment<br>deferments, but the original budget limit was JPY30trn <br>
(US$340 billion) and 2009 news reports say that the <br>government had burned through 50% of that in the first <br>month. Since then, we have seen various blogged numbers of <br>up to 500,000 firms applying for deferments, 90% of which <br>
were approved, and if those number are right, then probably<br>the government budget has already been exceeded. On the <br>current numbers, though, each of those 450,000 ailing <br>companies has JPY30m in unpaid loans that will go into <br>
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<br>[...Article continues]<br><br>Not only is JPY30trn a lot of cash to take from an already <br>stressed public purse, but more importantly the program is <br>such that the moving parts are loosely coupled. By this we <br>
mean that the Japanese government is offering to guarantee <br>the deferred loans, but it's been up to the banks to <br>actually assess and approve the deferments. Thus, the <br>government appears to be giving blanket coverage of those <br>
450,000 firms -- making the whole arrangement very <br>vulnerable to manipulation. Indeed, erstwhile political<br>reporter Jake Adelstein says in one of his stories <br>(<a href="http://www.worldpolicy.org/blog/last-yakuza">http://www.worldpolicy.org/blog/last-yakuza</a>) that up to <br>
1/3 of the companies applying for small business loans are <br>Yakuza front firms and they have no intention of ever <br>repaying those loans. If he's right, then in the moratorium<br>program alone, the Japanese government may have just given <br>
away US$100m.<br><br>Perhaps we shouldn't be surprised at this outcome, since <br>Adelstein also reports that the politician who dreamed up<br>the moratorium scheme, Kamei, has a long association with <br>the Yakuza and could well be messing with the consumer<br>
loans and banking sectors to keep his pals happy. What's <br>also interesting is that Kamei is very close to the other <br>"too-slick Willy" of Japanese politics, Tokyo governor <br>Shintaro Ishihara. Ishihara is notable for his ability to <br>
lose Tokyo tax payers about JPY100bn on a municipally <br>owned bank that he personally endorsed, only to dodge <br>responsibility for the whole fiasco. Rumors are rife that <br>the bank was brought to its knees by large numbers of<br>
loan defaults by Yakuza front companies taking <br>minimally-vetted loans. <br><br>As far as we can see, birds of a feather flock together.<br><br>The backstop for the bad loans on the Kamei moratorium, as <br>the banks start cutting off SMEs next April, is the<br>
government and its various guarantee corporations. We are <br>told that these organizations are likely to act tough but <br>will settle for the owners of defaulting companies making <br>token loan/interest repayments so that the loans can be <br>
kept on the books. As a result, we don't expect the rise in<br>bankruptcies to be sudden, but it will be steady. Further, <br>a loan repayment deferment automatically means no fresh <br>loans, so, many of these 450,000 firms that have been <br>
limping along for the last 3-4 years are likely to increase<br>their lay-offs of employees. This means that an increase in<br>the unemployment rate may be a more reliable indicator of <br>what is going on than the bankruptcy rate.<br>
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-----------------------------------------------------------<br><br>+++ NEWS<br><br>- Tanaka resigns over Yakuza ties<br>- Sony to chop 10,000 employees<br>- Recruit starting web-based prep school<br>- Stem cell fraud<br>- New fossils find<br>
<br><br>=> Tanaka resigns over Yakuza ties<br><br>Very good report out from Jake Adelstein about what is <br>really going on behind the scenes with the resignation of <br>the new Minister of Justice because of his ties with the <br>
Yakuza. Although Minister Tanaka only admitted attending a <br>wedding for a yakuza friend about 30 years ago, Adelstein <br>says that it was common knowledge that Tanaka has <br>fraternized with the Yakuza much more recently than that, <br>
and that part of his involvement was with a Yakuza <br>confidant covering up a tawdry love affair that Tanaka was <br>having. ***Ed: In other words, he is one bad apple who <br>should never have been allowed to sit in the Justice <br>
Minister's chair. The mind boggles to think that the Yakuza<br>have such high-placed friends even today.** (Source: TT <br>commentary from <a href="http://thedailybeast.com">thedailybeast.com</a>, Oct 18, 2012)<br><br>
<a href="http://bit.ly/WyISBd">http://bit.ly/WyISBd</a><br><br>=> Sony to chop 10,000 employees<br><br>It always amazes us that Japanese companies are happy to <br>employ so many people, and so perhaps the era is coming <br>
to an end. Sony has announced that it plans to cut 10,000 <br>people, or about 20% of its workforce by March next year, <br>as well as shutting a camera lens factory in Gifu. ***Ed: <br>The new CEO, Hirai, is quite a dynamo -- bad luck for many <br>
employees but important for the survival of the business <br>overall.** (Source: TT commentary from <a href="http://reuters.com">reuters.com</a>, Oct 19,<br>2012)<br><br><a href="http://reut.rs/VhaENw">http://reut.rs/VhaENw</a><br>
<br>=> Recruit starting web-based prep school<br><br>A Recruit subsidiary has started an online prep school for <br>university candidates, which offers videos of popular <br>teachers giving online lectures. The lessons will cost <br>
about JPY5,000 for a package of 10 videos, just 25% of the <br>cost of in-person classes. The videos are accessible an <br>unlimited number of times by both PC and cell phone. ***Ed:<br>Given how boring and mono-directional Japanese lectures <br>
are, it's a wonder prep schools just don't drop the <br>in-person format all together. At least that would save <br>them class room rental fees...** (Source: TT commentary <br>from <a href="http://e.nikkei.com">e.nikkei.com</a>, Oct 16, 2012)<br>
<br><a href="http://e.nikkei.com/e/ac/TNKS/Nni20121015D1510N01.htm?NS-query=recruit">http://e.nikkei.com/e/ac/TNKS/Nni20121015D1510N01.htm?NS-query=recruit</a><br><br>=> Stem cell fraud<br><br>Lots of embarrassment to go around last week at Todai, when<br>
it was revealed that the claims of stem cell breakthrough <br>experiments by one of its researchers were a bunch of <br>hokum. The researcher, Hisashi Moriguchi, claimed that his <br>team had treated heart disease patients in a trial with a <br>
US university, only to have that claim denied by the <br>university in question. While Moriguchi may in fact have <br>done some useful research at Todai, probably we'll never <br>get to hear what it was as he has now been sacked. (Source:<br>
TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Oct 19, 2012)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20121019D19JF487.htm">http://e.nikkei.com/e/ac/tnks/Nni20121019D19JF487.htm</a><br><br>=> New fossils find<br>
<br>Just in case you thought all Japan's newest fossil finds <br>are politicians in the Tokyo Metropolitan Government, <br>fossils of a more interesting variety have been found in a <br>cave in Okinawa. Researchers found human and animal bones <br>
and tools from 12,000 years ago. This latest find is not <br>the oldest remains, that honor goes to another dig site in <br>Okinawa (32,000 years), but apparently the items found were<br>in good condition and will yield valuable clues as to the <br>
lifestyle of the dwellers at that time. ***Ed: Apparently <br>the richest source of Japan's stone age remnants is <br>Okinawa.** (Source: TT commentary from <a href="http://japantimes.co.jp">japantimes.co.jp</a>, <br>
Oct 20, 2012)<br><br><a href="http://www.japantimes.co.jp/text/nn20121020b3.html">http://www.japantimes.co.jp/text/nn20121020b3.html</a><br><br><br><br>NOTE: Broken links<br>Many online news sources remove their articles after just a<br>
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<br>***------------------------****-------------------------***<br><br>+++ UPCOMING EVENTS/ANNOUNCEMENTS<br><br>=> No events this week.<br><br>***------------------------****-------------------------***<br><br>+++ CORRECTIONS/FEEDBACK<br>
<br>In this section we run comments and corrections submitted<br>by readers. We encourage you to spot our mistakes and<br>amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.<br><br>
=> No comments or corrections this week<br><br>***------------------------****-------------------------***<br><br>+++ TRAVEL DESTINATIONS PICKS<br><br>=> Sagami-ko Illumillion Adventure, <br>Enjoy a wonderland of light and magic in Kanagawa<br>
<br>Want to experience a very illuminating adventure? A few <br>hours’ drive from Yokohama, on the tip of Kanagawa <br>prefecture lies an amazing “illumination forest” that will <br>make your heart skip with joy!<br><br>The Sagamiko Illumillion is located near Sagami Lake, so it<br>
is advisable to wear layered clothing for you to be <br>comfortable in your stroll. After climbing up a few stairs <br>and passing through a couple arches of light, I was greeted<br>by Paddington Bear and the Central Lodge where we can <br>
refresh ourselves before we continue on with our adventure.<br><br><a href="http://japantourist.jp/view/sagami-ko-illumillion-adventure">http://japantourist.jp/view/sagami-ko-illumillion-adventure</a><br><br> <br>=> The Old and Trashy Tateishi<br>
In Search of the Real Tokyo #2<br><br>My ongoing search of the real Tokyo led me to Tateishi, in <br>the capital’s far east. Spankybruno had warned me when <br>describing his favorite place in Tokyo, "It's Shitamachi – <br>
dirty, old, trashy, and friendly". And indeed, located on <br>the edge of the metropolis, separated from the center by <br>two wide rivers, Tateishi seems to have been forgotten by <br>the capital’s expansion.<br><br>
Passing the Shin-Yotsugi Bridge, I felt I was leaving Tokyo<br>behind: on the other side of the Arakawa (Ara River), low <br>houses and plastic shelters were hiding in a solvent smell.<br>Thirty minutes later, I reached Keisei-Tateishi station and<br>
its ringing railway crossings. Far from the center and huge<br>supermarkets, I entered the decrepit covered market <br>adjacent to the station.<br><br>There, stands and stalls are squeezed next to one another,<br>selling cheap vegetables, grilled yakitori and 100-yen <br>
taiyaki. At intervals, faded noren drift over four-seats <br>counters, where the regulars chat in greasy smelling tents,<br>while, along the walls, cats prowl in search of fallen <br>crumbs. But despite the aura of neglect, the area is <br>
welcoming and people were not afraid to ask me to try a <br>sembei, discuss the cuteness of a puppy, or show me <br>photographs. I felt at ease in this friendly neighborhood, <br>separated by just two rivers from the rigid politeness of <br>
central Tokyo.<br><br><a href="http://japantourist.jp/view/old-and-trashy-tateishi">http://japantourist.jp/view/old-and-trashy-tateishi</a><br><br>***------------------------****-------------------------***<br><br>***********************************************************<br>
END<br><br>SUBSCRIBERS: 7,814 members as of October 21, 2012<br>(We purge our list regularly.)<br><br>+++ ABOUT US<br><br>STAFF<br>Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)<br>
<br>HELP: E-mail <a href="mailto:Terrie-request@mailman.japaninc.com">Terrie-request@mailman.japaninc.com</a><br>with the word 'help' in the subject or body (don't include<br>the quotes), and you will get back a message with<br>
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<br>J@pan Inc authoritatively chronicles business trends in <br>Japan. Each posting brings you in-depth analysis of <br>business, people and technology in the world's third <br>largest economy.<br><br>Visit <a href="http://www.japaninc.com">www.japaninc.com</a> for the best business insight on<br>
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