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Animation: Japan’s Aging Population

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Japan’s infamous “Lost Decade” was supposed to refer to the stagnant economic period from 1991 until 2000, after the collapse of the asset price bubble in Japanese housing and stocks.

However, it seems the phrase was coined a little early, as now it seems even more ominous. The “Lost Decade” has turned into the “Lost Two Decades”, and many of the same economic problems continue to plague the nation today.

The most recent data from Japan’s Cabinet Office pegged Japan’s GDP growth in Q4 of 2015 at -0.3% compared with the previous three months.

That’s now two negative quarters out of the four in 2015.

Japan’s Demographic Headwinds

The problem is that the outlook isn’t getting any better with time.

Japan is saddled with the most debt of any country, the largest monetary base as a percentage of GDP in the developed world, and the BoJ has now endeavored to go negative with interest rates.

In the background, and even more important, is Japan’s lingering demographic crisis. The country’s population is projected to fall from 127 million to 87 million by 2060, at which point more than 40% of the population will be older than 65.

Animation: Japan's Aging Population

Over the years, there have been many warnings that Japan’s population could begin to contract. However, this problem is now officially here, with the most recent census data showing that the Japanese population shrunk by nearly 1 million people between 2010 and 2015.

The working-age population could decline as much as 40% over the next 45 years. This would be coupled with a surge in the people dependent on social services, since Japan has some of the best life expectancy rates in the world.

By 2050, there could be just under 1 million Japanese that are 100 years and older in age.

Stopping the Decline

The urgency of Japan’s aging population is not lost on the public. In a recent Pew poll, Japanese respondents were asked if the next generation of children would be better or worse off than their parents. The overwhelming victor was “worse off” with a 72% share of the vote.

That’s why the current stated goal of the government is to keep the nation’s population from falling below 100 million by 2060. To do this, Japan is now working on “bold proposals” to find ways to raise the birthrate. The traditionally isolationist Japanese culture is even warming towards the idea of getting new blood through immigration.

However, even in meeting this audacious goal, the country’s population will still decline by 27 million people by 2060. It’s also unclear if or when economic growth could turn around, even in the best case scenario.

Turning Japanese

Japan was the first country to experience the cruel cocktail of economic stagnation, shrinking population, spiraling debt, and desperate monetary policy.

However, it won’t be the last.

Germany has an eerily similar demographic cliff. The U.S. has racked up $8.4 trillion in new debt under the Obama administration.

Central banks around the world continue to take unprecedented action. QE, negative rates, the war on cash, and helicopter money are all coming to a country near you. No policy option is sacred anymore.

We must watch the Japanese problem closely, because we will need to have better solutions.

Original graphic by: Revolutions

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Will Tesla Lose Its Spot in the Magnificent Seven?

We visualize the recent performance of the Magnificent Seven stocks, uncovering a clear divergence between the group’s top and bottom names.

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Will Tesla Lose Its Spot in the Magnificent Seven?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In this graphic, we visualize the year-to-date (YTD) performance of the “Magnificent Seven”, a leading group of U.S. tech stocks that gained prominence in 2023 as the replacement of FAANG stocks.

All figures are as of March 12, 2024, and are listed in the table below.

RankCompanyYTD Change (%)
1Nvidia90.8
2Meta44.3
3Amazon16.9
4Microsoft12
5Google0.2
6Apple-6.7
7Tesla-28.5

From these numbers, we can see a clear divergence in performance across the group.

Nvidia and Meta Lead

Nvidia is the main hero of this show, setting new all-time highs seemingly every week. The chipmaker is currently the world’s third most valuable company, with a valuation of around $2.2 trillion. This puts it very close to Apple, which is currently valued at $2.7 trillion.

The second best performer of the Magnificent Seven has been Meta, which recently re-entered the trillion dollar club after falling out of favor in 2022. The company saw a massive one-day gain of $197 billion on Feb 2, 2024.

Apple and Tesla in the Red

Tesla has lost over a quarter of its value YTD as EV hype continues to fizzle out. Other pure play EV stocks like Rivian and Lucid are also down significantly in 2024.

Meanwhile, Apple shares have struggled due to weakening demand for its products in China, as well as the company’s lack of progress in the artificial intelligence (AI) space.

Investors may have also been disappointed to hear that Apple’s electric car project, which started a decade ago, has been scrapped.

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