Sunday, April 24, 2011

(BN) Tsunami Speeds ‘Terminal Decline’ of Japan’s Fishing Industry

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Tsunami Speeds 'Terminal Decline' of Japan's Fishing Industry

April 25 (Bloomberg) -- The wreckage of a 379-metric ton tuna boat blocks the road to the deserted fish market in Kesennuma, once Japan's largest port for bonito and swordfish. Even after the debris from last month's tsunami has been cleared away, the industry may never recover.

"Thirty years ago we used to think Japan was the number one fishing country in the world, with the best catching and processing methods, but that's really no longer the case," Ryosuke Sato, chairman of the Kesennuma Fisheries Cooperative Association, said in an interview in the town, 400 kilometers (250 miles) north of Tokyo. "We've been in terminal decline."

Traffic at the port had dropped by 90 percent over the last 20 years as seafood imports rose, even before the country's northeastern coast was devastated on March 11. Destruction of boats, harbors and processing plants, coupled with fears of radioactive contamination in marine life, threatens to hasten Japan's turn to overseas for its most important food staple after rice.

Japanese eat more fish per capita than any other developed country, consuming 56.7 kilograms (128 pounds) annually, compared with a global average of 17.1 kilograms, according to the United Nation's Food and Agriculture Organization. Fish accounts for 23 percent of protein in the daily Japanese diet, compared with four percent in the U.S.

Fish Broth

Consumption begins with breakfast in Japan, an archipelago of nearly 7,000 islands, where a traditional morning meal consists of rice and grilled fish. In addition to sushi, staples including miso soup also contain fish broth. To feed the habit, Japan is the world's largest importer of fish, buying $14.4 billion worth in 2008, according to data from the United Nations Food and Agricultural Organization.

"We're the biggest fish lovers among the major industrial nations and the number one consumer," said Masayuki Komatsu, a professor at Tokyo's National Graduate Institute for Policy Studies specializing in ocean and marine resources. "It's like water and air to us."

Auctions at Tokyo's Tsukiji, the world's largest fish market that stretches over an area the size of 43 football fields, influences prices all over the world, according to Sasha Issenberg, author of 'The Sushi Economy.'

"It's like a combination of Wall Street and Sotheby's in the art market and a commodities trading floor," he said.

Five Years

Last month's earthquake and tsunami, which left almost 28,000 dead or missing, disproportionately affected Japan's northeastern fishing ports and towns. In Iwate prefecture, the tsunami caused about 106.6 billion yen ($1.3 billion) of damage to the fishing industry, according to data from the government. That's about ten times the combined total for the prefecture's agriculture and forestry industries.

Fishermen in Kesennuma, which has a population of 73,000, expect it to take as long as five years to rebuild the port and market, central to a fishing industry that provides 85 percent of the town's jobs.

The city government says 837 townspeople died and 1,196 were listed as missing as of April 22. A further 5,838 people, or 7.8 percent of the population, are in evacuation centers. In addition to the destruction of maintenance and refueling facilities, about 40 fishing vessels were lost, the cooperative's Sato said.

'Not Alone'

"There's so much damage, this is a crisis for the town and the fishing industry," said the 69-year old Sato, whose Kanedai Co. fish company has sales of 9.4 billion yen in Japan and China, with 230 employees. A poster on the wall signed by wholesalers and customers reads: "You're not alone, everyone is with you. Thank you always for the delicious fish."

South Kesennuma, where most of the fish processing plants were located, was the first area to be hit by the tsunami after it passed the island of Oshima that creates the entrance to Kesennuma's harbor about two kilometers off shore. In the harbor, trawlers and a refueling tank were slammed together, spewing fuel. Fire spread across the fuel-water mix, creating an inferno.

The 50-meter-long Myojin Maru No.3, licensed to catch yellowfin and albacore tuna in the Indian Ocean, is one of at least 10 giant vessels dumped around the town. It towers over gutted two-storey buildings owned by fishing companies about 500 meters from the fish market.

"Companies may have the money to rebuild but people are saying they don't want to come back," Yaeko Komatsu, 53, said as she gazed at the rubble of her seafood company employer she didn't identify. "They say it's dangerous."

Planned Reopening

The fish market is planning to partially re-open in June to provide a sales floor for the expected arrival of bonito boats. Longer-term plans depend on the amount of central government assistance, the cooperative's Sato said.

Reconstruction needs to happen fast to prevent workers from leaving the town for good, Itsunori Onodera, a Diet Member representing Kesennuma, said in an interview at the city hall.

Like many ports in Japan, Kesennuma developed a reputation for handling specific kinds of fish. Ships from all over Japan came to the town to sell saury, sharks and tuna. By adding maintenance and refueling facilities, Kesennuma became one of Japan's 10 largest fishing ports, Sato said.

The importance of fishing and towns like Kesennuma in Japanese culture belies the fishing industry's declining status in the economy. Fishing contributes about 0.2 percent of Japan's GDP, and the number of fishermen has dropped to about 200,000 from about a million after World War II, according to the National Graduate Institute's Komatsu, also a former official at Japan's Fisheries Agency.

Indonesian Workers

For fishermen like Tokio Takatsuka, who returned to Shiogama Port, 315 kilometers north of Tokyo and 80 kilometers south of Kesennuma, earlier this month to sell yellowfin tuna from the Pacific, that means hiring more crew members from the Philippines and Indonesia to make up for the shortage of Japanese applicants. They come as part of a government plan to ease labor shortages, and signs at the port are now written in Bahasa as well as Japanese.

"My generation never considered doing anything besides fishing," Takatsuka, 62, said in an interview last week next to his boat. "It's different for young people now."

Even as the government hurries to rebuild facilities, fishermen and consumers are worried about radiation from Tokyo Electric Co.'s Fukushima Dai-Ichi nuclear power plant, Akira Sato, mayor of Shiogama, said in an interview after the town's first fresh tuna auction since the March 11 earthquake. The fisherman Takatsuka sailed more than 60 kilometers wide of the plant on the way to the port, rather than hugging the coast, in order to reassure buyers.

'People Are Spooked'

"It puts a cloud over the entire fishing industry and Japan's food culture is suffering as a result," Jeff Kingston, director of the Department of Asian Studies at Temple University's Japan campus said. "People are spooked."

The level of radioactivity in water leaked from the No. 2 reactor of the Fukushima Dai-Ichi nuclear plant was 20,000 times the regulatory limit, Tepco said on April 21. A total of 520 tons of contaminated water leaked between April 1 and April 6, said Junichi Matsumoto, a general manager at the utility.

At Tokyo's Tsukiji fish market, sales of fresh fish fell to an average 583 metric tons per day in the week ended March 17, down 28 percent from a year earlier. The following week they dropped by 44 percent.

"If this continues for two or three years we don't know what will happen to our bodies from consuming contaminated fish," Yasuo Kawada, a 59-year-old manufacturing employee said in an interview. "I do worry."

Fish Bans

Radiation from fish and lobsters near the U.K.'s biggest nuclear polluter suggest radioactive material dumped into the sea from Tepco's Fukushima power plant isn't a long-term health threat, according to Richard Wakeford, a professor of epidemiology at the University of Manchester's Dalton Nuclear Institute.

The Sellafield nuclear-processing plant in northwest England has discharged at least 320,000 times more radioactive material into the Irish Sea since 1952 than what Tepco released from Fukushima this month, according to Bloomberg calculations based on data from both sites. Still, average radiation doses by seafood-consumers near Sellafield over 15 years have been half the recommended limit, studies show.

That hasn't stopped China, Korea, Taiwan and Hong Kong from banning fish imports from parts of Japan. The countries accounted for about 70 percent of Japan's fish exports in 2009, according to Japan External Trade Organization figures.

"Radiation is a grim reaper, you can't see it and you can't smell it," said Ken Banter who has worked as a fish importer in Tokyo for 22 years. "I would say it would have a profound effect on sales from those areas."

Still, overall sales at Tsukiji recovered to pre-quake levels last week, indicating Japanese consumers are returning to fish. Prime Minister Naoto Kan proposed a 4-trillion yen ($49 billion) extra budget that is likely to be the first of several packages to rebuild areas devastated by last month's record earthquake and tsunami, which will include assistance for the industry, the government said in an April 22 statement.

"It'll take three years, at most five years to rebuild the fish market," said Sato, in his ninth year as head of the Kesennnuma Fisheries Association. "In the meantime we need to know how we can continue to live here today, tomorrow, without jobs at plants which don't exist anymore."

To contact the reporters on this story: Stuart Biggs in Tokyo at . Kanoko Matsuyama in Tokyo at Frederik Balfour in Hong Kong at

To contact the editor responsible for this story: Bret Okeson at

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Kenyatta Lovett
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Monday, April 18, 2011

Cool Hunting: Luxe Home Swap

Luxe Home Swap

Five elite homes in unexpected places and an exclusive offer for CH readers

Even the most opulent hotels can't replace the comforts of home, where decor and amenities truly speak to your interests. While plenty of alternatives exist in the form of apartment swapping and rental sites, few tailor their offerings to the style-minded and are as affordable as the membership-based Luxe Home Swap.

The site allows users to browse thousands of homes from around the world to find a retreat specific to their holiday desires. Fans of mid-century Danish design can choose a contemporary flat in NYC or a historical apartment in Copenhagen, with quality assured by the membership-based model. The concept also means that you don't have to do a direct swap, but can visit any home that's available.

Even more tempting, Luxe Home Swap lists several options in locations so far-flung that there's no hotel for miles even if you wanted one. Below are our some of our favorites, each the perfect place—from houses in nature preserves to cliffside pools—to really get away from it all.

And if all that's not enough for you, Cool Hunting readers now get a Luxe Home Swap membership for $125—that's 20% off the annual fee.

Contemporary living a world away in Waikato, New Zealand

Nestled deep in the forests, this beauty has won awards for both sustainability and design. Achieving complete isolation is no chore here.

The house itself is as carefully put together as you could imagine, offering the ultimate wilderness retreat without losing any comforts of home.

Thoughtful design between land and sea in Brittany, France

With 26,000 square feet of open property to explore, a gorgeous indoor pool and a manicured Japanese garden, this architect-designed house is a perfect rural refuge.

The house is also located close to the Bay of Saint-Brieuc nature reserve, which has two rivers flowing through it and is known as "a paradise for bird watchers."

A modern house on the prairie in Kerry, Ireland

A modern holiday home only minutes from town and local entertainment. Surrounded by rolling hills and overlooking the Beara Peninsula, it's an ideal place for the family to discover Ireland's natural beauty and rich history.

The house is also great for the adventurist. It comes equipped with four bicycles, is located near two 18-hole golf courses—one of which is the century-old world class Kenmare Golf Club. For more rustic activities, the house is also near the sea, which offers great trout and salmon fishing.

A home as stunning as its view in Cape Town, South Africa

Four stories of pure luxury and 180° breathtaking views put this home in a class of its own. Swim in one of two pools, relax in the jacuzzi or walk to Clifton Beach—a laid-back riviera with beachside cafes perfect for sipping cocktails while the sun sets.

The house also comes with a manager on call to handle all of your requests, such as transportation to the heart of Cape Town or further out to the beautiful wine country.

A floating flat on the river in Vecht, Netherlands

This quaint houseboat has a contemporary feel. Collect yourself in the serenity of the garden or cruise the canals in the 21-foot motorboat that's also at your disposal.

The historic village of Loenen aan de Vecht is only a half-mile away, and both Amsterdam and the bohemian town of Utrecht are just 20 minutes away.


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Kenyatta Lovett
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Wednesday, April 13, 2011

What Lowering Taxes Won't Do

This is a quote this morning from a politician in response to questions about the rationale behind lowering taxes:

"I am a small business owner myself, and I can tell you that if we have less taxes and were able to put more in into our business, we can hire more workers."

Just so we are on the same page, businesses don't hire people because they have more cash. They hire people when they need to increase capacity. Capacity is determined by the potential for demand. Okay, I see some blank stares in the crowd, so let's look at it a different way.

I am a small business owner, selling $5 milkshakes. Let's say my taxes go down by 50%, so now I can keep more of my profits. You, the customer, still have the same amount of money, along with price increases in gas, food, and other things. So, you buy the same amount of milkshakes from me that you normally do - 1 a month. So, my demand hasn't really gone up any, but I have all this "NEW CASH". So, here are a few options for my cheddar.

  1. Hire a new person to sit around and give me new headaches
  2. Buy a new milkshake machine that does the job of two workers
  3. Buy a new foreign car
  4. Take advantage of low prices from excess capacity in some other industry, like travel and foreclosed homes
  5. Invest my savings with the guys on Wall Street

Tough choices right? If you are still stuck, number one is probably not going to happen, unless (1) there is demand to justify the increase in capacity, (2) it is a wasteful and inefficient operation, or (3) your wages are so low that it's no skin off your back.

Essentially, lowering taxes only means that government needs less to do its job. The disabled person in need of services and the fact that you need to hire a new person to handle "all the new work" have nothing to do with each other. In this same interview, the politician said that several business owners are unwilling to hire new people because of what's going on in Washington. Now think about that for a moment. You have demand, and you've maxed out capacity, but the situation in Washington is forcing you to walk away from new revenue. Really?

I remember a friend once complaining about their spouse not working, but spending all the money. I recommended influencing the spouse to work to cover some of the expenses. The response, "the taxes would kill us". So let me get this straight. If I make $150,000 a year, with taxes in excess of 35%, and my spouse gets a job to make $24k a year, I go in the hole for the effort. There's not even an increase of $1 in my household. It made no sense, and this makes no sense. When the line gets long at the milkshake stand, trust me, I will be hiring more people. 

That's it class, place your excuses on my desk when you leave.

By the way, I called for a Fed Funds rate increase to 8%, in 2006.

Tuesday, April 12, 2011

Quantitative Problems and Qualitative Attitudes

I am amazed by the inability of people to match up their quantitative problems (budgets) with the qualitative behaviors (must haves, needs, pet projects, etc.). It appears they understand that their paycheck is supplied with money, but they can't seem to correlate the money they receive to the money they waste in their operation. It's like saying, "I understand that I need four dollars to get this item, but how do I get this item with one dollar?"

The answer is fairly simple. If you can't accept the answer "you can't", then you only have two options left: three more dollars or a pistol. That's it. I honestly don't get it. The sick part of this problem is the intellectual presentation of this "need".

So, you ask the question, "how did we get in this bad financial state as a nation?". The answer is right in front of you. If you can't make a decision when your "political career" isn't riding on it, then how in the world would you expect a CEO, a senator, or some other leader to make the tough choice.

Please understand, this has nothing to do with hard times. We all have them. This is all about our problems drowning our preferences. If it's not all about money, then why are you using money in your operation? Just saying.

Saturday, April 09, 2011

The new tax havens

American companies are finding new overseas tax havens to legally protect some of their profits from the U.S. tax rate of 35 percent, among the highest in the world. Lesley Stahl reports.

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Kenyatta Lovett
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