ONLY for articles/talk about economic impact.

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Quote:

General Motors Co. will suspend production at its assembly plant in Louisiana for a week starting next Monday on a shortage of Japanese parts due to a catastrophic earthquake in the country, the company said Thursday.

It is the first time a U.S. automaker has halted production because of an impact stemming from the massive quake, according to U.S. media.

Given there are many manufacturers in Japan that supply parts to U.S. automakers, such an impact is likely to widen should resumption of parts production will be delayed in Japan.

The Shreveport plant in Louisiana manufactures models including pickup trucks. While there is no prospect for resumption yet, the company said production will resume ''as soon as possible.''

''Like all global automakers, we will continue to follow the events in Japan closely to determine the business impact, working across the organization to maximize flexibility, supply the most critical operations, and effectively manage cost,'' GM said in a statement.

''Our hearts and prayers are with the people of Japan and their families as they work to recover from this disaster,'' it said.

http://english.kyodonews.jp/news/2011/03....

My thoughts/questions:

1. Will Japan go from an exporter nation to an importer nation?

2. What percentage of Japanese-made components do our manufacturers rely on? The rest of the world's manufacturers?

3. Will Japan go from buying US Treasuries to selling US Treasuries in order to pay for the massive rebuilding?

1) Short term, they'll be importing more than they export. Particularly until manufacturing can start back up (electrical power.)

2) No clue.

3) Possible, but I sorta doubt it. If they do it could well be under the table selling to the fed to keep it from impacting markets.

Holders of US Debt:

http://www.ritholtz.com/blog/2011/03/who....

Padrino has good information on this linked in Gold regarding the tech firms in Japan. Maybe he/she can move it down here? TIA

They hold a ton of US debt. They can "spend" just a fraction of that to rebuild the northern area of the nation.

Once things stabilize, there's going to be a building boom in Japan.

Lots of jobs for those in businesses washed away by the tsunami - I'm assuming the insurance companies are all going to be insolvent if they aren't already, and not paying any claims.

I feel badly for the loss of life and the broken families and utter carnage.

And I pray we never get a 9.0 anywhere near the New Madrid fault in the USA.

John

Same story but from WSJ.com - http://online.wsj.com/article/SB10001424....

Here's a few quotes:

Japan's factories mainly supply the Japanese market. However, they are also a source of engines and parts for assembly plants overseas as well as some vehicles that are made only in Japan, including the popular Toyota Prius. GM, for instance, gets transmissions for its battery-powered Chevrolet Volt from a Japanese supplier. Japan also is a supplier of high-powered batteries that go into some of the hybrid vehicles produced in the U.S. In addition, the country is a critical supplier of electric components used by virtually all auto makers.

"The race to find ample capacity for these highly specialized components (semi-conductors, displays, sensors, resistors, etc.) before inventory depletes will be very challenging," IHS Global Insight Automotive Group said Thursday in a report. "The effects will emerge in the coming weeks—several variables will influence how quickly these issues take effect and how quickly the OEMs can overcome supply disruptions."

Global Insight says part shortages will likely begin to affect production outside of Japan within three to six weeks.

GM declined to say which part caused the shutdown in Shreveport. But, in a research note on Thursday, Credit Suisse analyst Christopher Ceraso said he expected it is related to semiconductor or microcontroller supply.

Asi, I've been thinking about this for the last two days. I don't think anyone (that I've read) has thought this whole mess out. I think this will have much deeper repercussions into our own domestic economy than what most people think. I also think this gives thebernanke a ****ing e-ticket to QE3, which ****ing sucks.

Quote:

I think this will have much deeper repercussions into our own domestic economy than what most people think.

Yup.

And the longer they go without sufficient power in japan, the worse it's going to be.

Econ. Minister Kaoru Yosano vid
http://insider.thomsonreuters.com/link.h....

JAP
http://graphics.thomsonreuters.com/AS/pd....
http://graphics.thomsonreuters.com/11/03....
http://graphics.thomsonreuters.com/11/03....
http://graphics.thomsonreuters.com/11/03....
http://graphics.thomsonreuters.com/11/03....
http://graphics.thomsonreuters.com/11/03....
http://graphics.thomsonreuters.com/11/03....
http://graphics.thomsonreuters.com/11/03....
http://graphics.thomsonreuters.com/gfx/D....

new stuff not posted in gold
http://graphics.thomsonreuters.com/11/03....
http://graphics.thomsonreuters.com/F/12/....
http://graphics.thomsonreuters.com/11/01....
http://graphics.thomsonreuters.com/11/02....
http://graphics.thomsonreuters.com/F/12/....
http://graphics.thomsonreuters.com/11/03....


US
http://www.ucsusa.org/nuclear_power/reac....
http://graphics.thomsonreuters.com/11/03....


china plans vs rest of world..
http://graphics.thomsonreuters.com/11/03....

Apple and Boeing also have a problem:
http://news.sky.com/skynews/Home/Busines....

And, according to a report from research firm IHS iSuppli, Apple may face shortages of key elements for the iPad 2.

Five parts for the device are made in Japan, including the battery and the flash memory used to store music and video on the device.

These difficulties are likely to exacerbate Apple's supply problems, with many stores selling out of the iPad 2 within hours of its US launch.

As such analysts are suggesting that the shortages could cause a fall in Apple's revenues of around 1% for the quarter.

And aircraft-maker Boeing is deciding how to deal with a possible shortfall in parts - nearly one third of the elements for the forthcoming 787 Dreamliner come from the country.

Boeing told the Wall Street Journal it has "identified points of risk within the supply chain and developing mitigation plans."

And according to analyst Tim Denoyer, unless Japanese suppliers revive their plants and send parts within the next 10 days, the problem will become acute.

http://www.businessinsider.com/the-12-ja....

12 japanese companies slammed the hardest by the disaster

#1 on the list, by a huge margin, is TEPCO

Price Return between March 11 and 17th: -62.38%

Sony has announced that 6 of its plants remain closed in Japan. These plants make a variety of products, including lithium-ion batteries.

Hard to project the overall economic impact.

But one thing's for sure, a lot of companies now have a lot of cover for earnings misses over the next couple of quarters.

We (no names) already had to cancel many orders for electronics at work. We have also had to cancel A LOT of orders we were set to export to Japan.

HOWEVER, some orders are no being filled / going to China directly. For the most part we act as middle man, so now we are taking ourselves out of the equation and acting more as a logistics player (temporarily - I hope).

By the way, we are the American arm of one of the big 5 Import/Export companies in Japan.

Part of Ricoh which makes toner cartridges based in Miyagi Prefecture.

Quote:

Dear all,

We have been informed that the Ricoh factory in Japan that produces the toner cartridges for all our photocopiers has been destroyed as a result of the earthquake. At this point it is unclear what contingency plans the company have in place and for how long the lack of production will last, but it is very likely that supply will be affected as existing stocks run low.

We have today ordered a significant number of cartridges for our fleet of copiers to ensure we have stock for at least the short term and will continue to monitor the situation to try and minimise the impact this has.

Can I ask that you please support us in this and try to help the situation by considering what you print and photocopy and reducing the quantity wherever possible. Clearly the less the copiers are used, the longer our current stock of cartridges will last!

If you need to produce handouts and materials for teaching purposes, please consider using Moodle as an alternative. The ILT team will be more than happy to assist if you require any help or guidance with this – they can be contacted on x4883 or via e-mail.

I will keep you informed as the situation progresses. Please do not hesitate to contact me if you have any queries regarding this.

Many thanks in anticipation of your support,

Jacqui

http://www.washingtonpost.com/business/l....

Lack of Japanese parts disrupts production of GM’s European subsidiary
By Associated Press, Friday, March 18, 1:14 PM

BERLIN — A spokesman for General Motors Co.’s European subsidiary Opel says a shortage of electronic parts from Japan will force the company to halt car production at two plants next week.

Stefan Weinmann said Friday two of three shifts will be canceled at a plant in Eisenach, Germany on Monday and Tuesday. Another plant in Zaragoza, Spain will remain closed on Monday. The plants produce the Corsa compact car.

The company says a manufacturer in Japan cannot supply electronic parts needed in production due to the earthquake and the tsunami that have struck the country a week ago.

Weinmann declined to specify what parts were missing.

In the U.S., GM said Thursday a shortage of parts from Japan will force it to halt production at its pickup plant in Shreveport, Louisiana, next week.

AIG sees $1 bln of catastrophe losses in first quarter

Quote:

AIG noted that the $1 billion number was a preliminary estimate that also includes losses related to the New Zealand earthquake, U.S. winter storms, northeast Australian floods, Cyclone Yasi, and the Brazil floods that have occurred in the first quarter so far.

http://www.marketwatch.com/story/aig-see....

Caterpillar faces potential production delays

Quote:

Up to this point, Caterpillar, a manufacturer poised to play a key role in the rebuilding of Japan, said that supply-chain disruptions in Japan have yet to hurt production outside the shaken country.

However, factories around the world “may be sporadically impacted as a result of the situation in Japan,” the company said in a statement.

http://www.marketwatch.com/story/caterpi....

Deere & Co. Warns of Delays Due to Japan Disaster

Quote:

The Moline, Ill.-based company said Friday it expects delays on delivery of some excavators sold under both the Deere and Hitachi brand names, as well as Hitachi-branded mining equipment.

http://www.nytimes.com/aponline/2011/03/....

Hedge funds hit by quake-fueled market selloff

Quote:

Funds run by Paulson & Co., Tudor Investment Corp. and Sparx Group were among losers, according to an update by Societe Generale’s Lyxor unit, which runs hedge fund-managed accounts.

http://www.marketwatch.com/story/hedge-f....

AFLAC... One in four households.

Pat: Oh ****.

I am more curious about how much of the Japanese slack will be picked up by China and if China will grasp this opportunity to move up the food chain.

Here are some companies that do business w/Japan and the effect the disruption of the supply chain from Japan has on their business.

Sony Ericsson, the smartphone joint venture between Japan's Sony and Sweden's Ericsson, said the earthquake would affect its supply chain

German carmaker Volkswagen warned of a possible medium-term components shortage.
Mr Winterkorn said the group was concerned about its Japan-sourced gearboxes as its Japanese supplier faced repeated power disruption at its plants.

...Nokia, the world's largest mobile phone maker, said it anticipated disruption to its supply chain. The company declined to comment. In 2010, 15 per cent of the components in its handsets were sourced in yen.

iSuppli, an analyst firm, said that some Apple components, including flash memory and a thin battery used in the iPad 2 tablet, came from Japan and it warned that the company might "have difficulties obtaining this battery, and it may not be able to secure supply from an external, non-Japanese source".
Apple declined to comment. Most flash manufacturing facilities are in regions not yet affected by the quake and tsunami but problems with power, transport or other issues could affect supply for the iPad 2.

Fred Smith, chief executive of FedEx, the world's largest cargo airline group, said there might be some "pinch points" in supply chains in Japan, with "some effect" on automotive and high-tech production.

Intel, the world's largest chipmaker by sales, and Qualcomm, the biggest supplier of chips for phones, said the earthquake would not hurt production.

Motorola Mobility and Research in Motion, maker of the BlackBerry, said they saw little or no impact on their supply chains.

Cut from: Multinationals warn over Japanese supplies - http://bit.ly/ftl2Qq #cnn

Tiffany cuts 1Q outlook on Japan store closings
Tiffany & Co. lowers its 1st-quarter earnings guidance on concerns about Japan

http://finance.yahoo.com/news/Tiffany-cu....


Michelle Chapman, AP Business Writer, On Monday March 21, 2011, 11:03 am EDT
NEW YORK (AP) -- Tiffany & Co. is reducing its first-quarter earnings forecast as it deals with some store closings and limited hours in Japan in the wake of the earthquake and tsunami there.

The dimmer outlook provided on Monday came as strong holiday demand and healthy results both domestically and abroad helped push the company's fourth-quarter net income up 29 percent.

Tiffany is one of the U.S. retailers most exposed to Japan's economy and appetite for luxury goods. Of Tiffany's 233 stores, almost a quarter of them -- 56 -- are in Japan. It's also one of the first companies to specify the business impact of the quake.

The jewelry maker known for its turquoise box now expects first-quarter earnings of about 57 cents per share, down from a previous forecast of 62 cents per share.

Analysts surveyed by FactSet predicted lower earnings of 55 cents per share.

The company's stores in the Kanto and Tohoku regions, which make up more than half of its Japanese sales, were closed or had reduced hours after the disasters. Physical damage was limited to only a few stores, Tiffany said.

The retailer expects Japanese sales, 18 percent of its business in 2010, will drop 15 percent in the first quarter.

For the full year, the company anticipates adjusted earnings of $3.35 to $3.45 per share. Wall Street forecasts $3.70 per share.

Tiffany predicts 2011 worldwide sales will climb 12 percent to 14 percent, with Japanese sales facing a mid-single-digit percent decline.

Fourth-quarter net income increased to $181.2 million, or $1.41 per share, for the period ended Jan. 31. That compares with $140.4 million, or $1.09 per share, a year ago.

Excluding a charge tied to moving its New York headquarters staff, earnings from continuing operations were $1.44 per share.

This surpassed the $1.39 per share that analysts expected.

Its stock added $3.60, or 6.3 percent, to $60.89 in morning trading. Over the last year, the shares have traded in a range of $35.81 to $65.76.

Revenue improved to $1.1 billion from $981.4 million, matching expectations. Tiffany reported sales increased across all regions and said new products, such as its yellow diamond collection, helped its performance.

Chief Financial Officer James Fernandez said during a conference call that the jeweler recently raised some of its retail prices in many product categories due to higher costs. He indicated that the company may increase prices later in the year if deemed necessary.

Fernandez said shoppers did not appear to be resistant to the price hikes and seemed to understand Tiffany's need to address rising costs.

In the fourth quarter, worldwide revenue at stores open at least a year climbed 9 percent on a constant exchange rate basis. Gains were reported across all geographic regions.

This figure is a key indicator of a retailer's health because it excludes revenue from stores opened or closed during the year.

Tiffany's full-year earnings climbed 39 percent to $368.4 million, or $2.87 per share, from $264.8 million, or $2.11 per share, a year ago.

Annual revenue rose 14 percent to $3.09 billion from $2.71 billion.

Sales of items under $500 dropped in the U.S. Many other product categories, including fine and fashion gold jewelry, designer jewelry and engagement rings, increased.

Luxury spending has been making a comeback as economic conditions improve, as the affluent seem to be recovering from the recession faster than others as the stock market rebounds.

Worldwide revenue at stores open at least a year rose 8 percent on a constant exchange rate basis.

Total sales in Japan climbed 7 percent in 2010 due to the stronger yen, while revenue at its stores open at least a year fell 4 percent on a constant exchange rate basis.

TIF being up 5% on that news is quite telling. The legitimacy of the "market" should be greatly in doubt to even the most casual observer.

copied from ZH -

by Cognitive Dissonance
on Fri, 03/18/2011 - 18:21

I don't wish this to sound flippant, but I'm sure Japan's corporate argiculture is rubbing their hands in glee about the prospect of finally being able to come in and buy all those smaller and midsized lots for pennies on the dollar after their efforts to buy were rebuffed for several generations. All those small farms that have been in the family for generations will now be stressed to the max to rebuild if there is any family left to rebuild. Think about this for a while and you will see why large corporations find "opportunity" in disaster.

I suspect that the Japanese government will pass laws that condem large tracks of farm land in the name of the national interest of getting that land back into food production. Guess who or what will be directing this operation from the back room and who will be ready with checkbook in hand? At the same time the corporations and government will conveniently ignore insurance companies who drag their feet paying claims on the family farm equipment and buildings. It's right out of the playbook.

http://www.zerohedge.com/article/tepco-d....