Empty Cabs, from Edward Humbert

October 25, 2006 |


Japan is in play. Largecap stocks are languishing in 2006 after outsized gains last year. Smallcaps, however, are down 50% in 2006. That’s right, 50%! Japanese smallcaps indices are called “MOTHERS” and “HERCULES”. Plus, no one has a clue about the BOJ. It seems that they want to hike rates again but persistent worries about deflation still haunt them. We’ll see. Anyway, I did a little counting last night. The weather in Tokyo has been horrendous. Typhoon type rains and winds for three straight days and nights. I took a cab from my gym in Otemachi to the Grand Hyatt in Roppongi. It’s a 15 minute ride. The cost? Y660, or about $5.50. Further, I counted more than 200 empty and available cabs on the road during my short journey. I’ve lived for long stints in NYC, London and Paris. There is no way to get a cab in those cities on a rainy night. Certainly not for $5.50. The point is that a shrinking population has all sorts of negative consequences on growth and prices. Where will the drift come from — or should it be a negative drift?


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