Japan and inside information

Bank of Japan Governor Haruhiko Kuroda is addressing Parliament later today and there is now every chance that he hints at further easing after Japan’s forth quarter GDP data undershoot market expectations.

Growth for the December quarter printed an anemic -0.4% against expectations of a fall of 0.3%. The annualized rate of growth slipped to -1.4% from 1% in the third quarter. Overall growth is now back where it was in the second quarter of 2015.

This,mostly bad news from Japan, has GDP vs expectations.  But Japan needs all the data collectors betting,  including Kuroda.  When we have everyone betting, viatheir smart cards, then the surprises reduce, reduce down to the transaction costs of clearing a purchase, up to days with smart cards.  Everyone in the economy self reports, by just tapping away,at their deposits, their screens, the price beacons, the trading kiosks, and kissing cards with their neighbors.  Money is as accurate as can be, inventory volatility drops 15%..  All because the bots are human tamper proof and statistically honest.

Where is the economic information?

The betting bot generates a tree, a spanning tree that decodes a uniform random sequence into a representative sample of Japanese transactions.  The tree or a transformation of it generates the banker yield curve. There should be no better representation of the economy.  If the bot balances the inside/outside, to minimize congestion in the tree, then it participates in the self adapting statistics.