>>o the ldp,he liberal democratic party is out power.the democrat party of japan in poer with, ill,w 5.7% umployment in jan. 200% o gdp, e debt200% of gdp. declining populati. what does new leadership do to address those kinds of problems. >> i think there is a significant task aad for e government. they came into powe when they were campaigning duri this election. theyalked very much about an additional simulus. they wanted to put more money back into japanese housolds. they were ing to do this throh tax cuts and transfer payments, one o their most famous pledges is to give families w are rearing downchildren -- young children me money in their ckets. so i think this is a government that wants give the japanese consumer much more latude much more of a ll inhe engine of janese growth. buthe long-term strategy is toransform the japase economfromxport-driven economy into this domesti demand-driven economy. and that requires a fairly significant growth stregy. it'sot clear yet wch way they want to go. but in that piece, he did suggest that

they've never had a viable alternative, a full political challenge to the ldp.someone they could vote into office. >> daniel sneider, what is this vote for the postwar alliance with the united states after all these years, that new faces are in charge? >> well, i think the alliance itself is not in question. and the new party, the democratic party of japan supports the alliancement but they clearly want to have japan play a more assertive role. they talk about a more equal relationship. they want to emphasize japan's ties with asia neighbors a little bit more, sort of balance out the relationship with the u.s. with relations with asia. so there's some differences. and i think we could see some tensions over some issues as particularly as the new government takes power. there is going to be a transition or new people in office whose who've never been there before. you about i don't see this as a threat to the alliance itself. >> even though the op ed piece that we mentioned, the new leader said these american style free market economies are what lead us to the pr

surely this is not going to be good news for the ldp. they can't possibly use that to champion their caught to get japanese voters to vote for them. >> no, i think that's right. there are signs that the economy is turning around and probably faster than most developed economies at the moment. but it's too late for the ldp, and they're tarnished of the mismanagement by the past 20 years. people are fed up with it. and i think the first time really in a long time, they have a credible choice, as well. of course, you have to remember, the economy was terrible many times in the 1990s, but the opposition was so shambolic, they will be kept on winning. >> if the opposition democratic party wins, how much power do they truly have on make real reform? >> well, they have power probably in the sense that they're going to be there for the best part of four years, so you can't just ignore them and hope they're going to go away. which was the case when those temporarily a change of government in 1993. exactly how much of the change they'll be able to

do you think that is going to help the ldp's chances? >> well, i think it will help ldp somewhat, but not too much. i think the ldp will be defeated at this time. >> what do you think is going to swing the votes in the democratic party's favor? >> well, i think many. i think basically the populous has been somewhat -- by the way so many policy budget cuts in many areas, especially in social policy. and so this time, the bj will win somehow. >> do you think japanese voters are prepared for a change in government? are they prepared to usher in a new leadership at this stage, at a time when the economy is uncertain? >> i think the bureaucracy, some of the bureaucracy will oppose some impediments to power transitions. but very difficult to say. >> it's becky in london here. how muchiggle room, if you like, how many different choices would a new party have when they came into government? i mean, they're facing the same problems as the existing power holders and they have to to a certain extent support similar policies in trying to prop up the

i think we have a very good chance of collecting ldps in this year's corn crop. >> you're saying thatoy beans are looking good. corp. is a different situation. let's get on the other side of the fence now and i don't care whether you're a dairy producer or sheep producer or chicken or cattle, what do we need to do from that standpoint in order to minimize loss because i don't think there's much money being made out in the livestock industry. >> it's a tough situation right now because everybody is playing poker. as we discussed off the camera, waiting for the guy down the road to shut down or liquidate part of its herd and nobody is willing to give because they have a capital investment in facilities. i think it will take leadership in the grower organizations, be it the pork producers or dairy industry to come up with a plan and say that everybody needs to voluntarily cut back. >> the group got together and they had a liquidation plan and that sort of thing. anything that a producer can do? >> yeah, at this point, al, i agree with rick that you're looking at a situation where you hav

and so i wouldn't really characterize them as less market-oriented than the ldp. ed indeed, what we could see is a party -- what we're going to see, actually is a party that is much more focused on protecting individuals as opposed to protecting jobs, as the ldt was focused. and so to that extent, we're going to see party and power that's going to be less focused on directly intervening in markets. and more focused just on protecting individuals. >> if that is the case then, how would you play it? what are your best plays in japan right now? >> right. so, you know, the way i look at it is, there is no expectations, so there should be more positives on the markets. as a matter of fact, i think if you're global, you know, fund manager, in way of japan -- should be ending the dilemma of my god, i think something is going to happen. because this is a big event anyway. it's not investors, there are borders in japan -- likelihood is doesn't win. >> so you favor new technology, environmental technology. >> right. >> and exposure to china. >> right. so, you know, my point

they expect the democratic party of japan to beat the ldp in sunday's election. expect that they'll do more in terms of their relations with asia. that'll help their exports. expect them to do some things to stimulate the consumer and also, very importantly, sue, to reduce the bureaucratic influence and their position in japan. tremendous government bureaucracy. don't forget, sue, japan is still very cheap. it's up 18% year to date in yen terms, but it's only up about 10% in dollar terms. japan sells for 0.5 times sales. the u.s. sells for.75 times sales. japan sells for 1.3 times book. the u.s. sells for 2.0 times book. and lastly very importantly earnings in the united states are supposed to grow 33% next year. in japan the consensus is for 65% earnings growth in 2010. so we like japan and we would be adding here. >> thank you both. appreciate it very much. >> thanks. >> the "wall street journal" reports an overwhelming majority of investors in cerberus's hedge fund want out of that fund's core fund. this after cerberus tried to convince them to move assets to

it looks like it's going to end some 50 years of ldp rule.i think that will give the yen a short boost. the big story today, the nikkei news has floated again this story of a japanese homeland repatriation act where japanese companies can bring profits home with a lot less tax to pay. though people tend to ignore the fact that an awful lot of this is hedged. so our overall view is that the yen should be weakening. and we don't really see japan as a really good place for its money. >> dollar/yen at 93 right now, how comfortable do you think the boj is at dollar/yen? at what point would they start to see something? >> i think we have to wait until after the electric. and there may be a big shake-up of personnel around there next week. the dpj view seems to be less interventionist, but i can they'll get a lot of pressure if dollar/yen does slide below 90. so i think maybe next week if it's heading towards that way, we might get a few subtle hints or maybe not as subtle. >> we had the data out overnight. house prices up for the fight month in a r

the ldp is criticizing the opposition cash payout plan as fiscally irresponsible.echoed among some economists. some say it's a recipe for a financial disaster. at the time when japan's debt to gdp ratio is 170%. that's the highest n world and an anomaly in peaceful times. the last time the ratio neared 200% was during the second world war. she's not sure how she will vote. i'm not sure all the campaign pledges will be carried out in the future, she says. but she is pretty sure what she will do with the $750 the democrats have promised her. save. cnbc, tokyo. >> well, today, japan's nikkei 225 was down 0.8%, off the worst levels of the trading day, however. in shanghai, the biggest loadser, off 2.6%. china construction bank denied rumors that it is looking to raise more capital. let's get more in china and japan with darius ka wall chee. derek, thank you for joining us on "worldwide exchange." how much of today's fall were based on mr. wen's comments yesterday? >> i think the comments from the prime minister played an important role as the remarks commented on the b