Tuesday, August 31, 2010

Japan - Are the three "D's" going to kill its economy?

Update January 27th, 2011

Standard & Poors has downgraded Japan’s long-term credit rating from AA to AA minus with a stable outlook.  S&P downgraded the country based on the fact that its “fiscal deficits (are likely to) remain high in the next few years”.  Is the United States next in line for a downgrade?

Update October 8th, 2010

Japan's Cabinet approved a $61 billion economic stimulus package designed to stimulate the country's rather lethargic economy.  The government hopes that the package will add 0.6 percentage points to the country's GDP and create or save up to 500,000 jobs.

Update October 5th, 2010

The Bank of Japan announced today that they have reverted to a zero interest rate because there are signs that the very strong yen is hurting a fragile economic recovery in Japan.  Overnight rates will now range from zero to 0.1 percent and will be kept in that range until prices are stable.

Update - September 8th, 2010

Japanese ruling party powerbroker Ichiro Ozawa, who is challenging Prime Minister Naoto Kan for leadership of the country, stated today that the government of Japan may need to issue more debt to fund its economy if conditions worsen. There is a possibility that Japan will have to reverse Prime Minister Kan's efforts to reign in the country's massive public debt. Japan is increasingly boxing itself into an economic corner because of the size of the country's debt in relation to the size of its overall economy. The Japanese economy is facing additional pressures because of the rapid rise in the yen to its current 15 year highs; this results in decreased international demand for Japanese goods creating further growth issues for the Japanese manufacturing industries.

Original Posting

In light of Moody's recent commentary on potential downgrades to the sovereign debt of both Great Britain and the United States, I thought I'd take a look at a G8 nation that has already had its debt downgraded.

Back in May 2009, Moody's Investor Service downgraded Japan's sovereign debt by two notches from Aaa (Triple-A) to Aa2. Again in February 2010, Moody's threatened to change its outlook on Japan to negative unless the country got its debt under control. In its May downgrade, Moody's cited challenges that face the Japanese economy because of their increase in debt issuance to fund a massive $159 billion stimulus spending program to combat the recession of 2008 - 2009. Japan issued huge amounts of debt during the last 2 decades to combat deflationary pressures in their economy. Other than the threat of deflation, the parallels to the United States economy with its massive debt growth is rather interesting.

While the Japanese government is massively in debt, the same cannot be said for the country as a whole. The nation as a whole has a pool of around $15 trillion in savings, thanks in large part to its frugal populace which have always been encouraged to save.

According to the Wall Street Journal, Japan's nominal GDP dropped 0.9% in the second quarter of 2010 to $1.288 trillion, falling to third place in the world after China whose nominal GDP came in at $1.337 trillion. Last year, Japan's annual GDP came in at $5.108 trillion compared to China's which came in at $4.98 trillion, however, recent growth patterns show that China's economy could well end up being larger than Japan's on a long term basis by the end of 2010.

There are 3 factors working against the Japanese economy; demography, debt and deflation.

First I'll deal with Japan's changing demography.

From the CIA World Factbook 2010, Japan has a total population of 126.8 million people, the 10th most populous nation in the world. They have one of the lowest birthrates in the world at only 7.41 births per 1000 people (222nd in the world putting them in second last place) and with population growth of -0.242%, they also have one of the lowest population growth rates in the world (216th in the world). One of the issues facing Japan is their extremely low fertility rate; only 1.2 children are born to an average Japanese woman (219th in the world putting them in fifth last place), well below the normally accepted replacement rate of 2.1 children per woman in developed nations.

The three factors of a lowered birthrate, a raised life expectancy (the longest in the world) and a very low historic immigration rate are working their magic against the long term viability of the Japanese economy. Basically, Japan is the first nation in the world giving us first hand evidence of a demographic shift that could lead to a marked decline in its population by 2050; from their experience, we will get a taste of what it will be like as the North American and Western European baby boomer populations age.

Here's a quote from the Japanese Statistics Bureau explaining the demographic shift that is expected:

"The population pyramid of 1950 shows that Japan had a standard-shaped pyramid marked by a broad base. The shape of the pyramid, however, has changed dramatically as both the birth rate and death rate have declined. In 2008, the population of elderly citizens (65 years and over) was 28.22 million, constituting 22.1 percent of the total population and marking record highs both in terms of number and percentage. The speed of aging of Japan's population is much faster than in advanced Western European countries or the U.S.A. Although the population of the elderly in Japan accounted for only 7.1 percent of the total population in 1970, 24 years later in 1994, it had almost doubled in scale to 14.1 percent. In other countries with an aged population, it took 61 years in Italy, 85 years in Sweden, and 115 years in France for the percentage of the elderly to increase from 7 percent to 14 percent of the population. These comparisons clearly highlight the rapid progress of demographic aging in Japan."

"On the other hand, the percentage of the younger age population in Japan (0-14 years) has been shrinking since 1982. In 2008, the younger age population amounted to 17.18 million, accounting for 13.5 percent of the total population, the lowest level on record since the Population Estimates began. The working-age population (15-64 years) totaled 82.30 million, continuing its decline since 1996. In share terms, it accounted for 64.5 percent of the entire population. As a result, the ratio of the dependent population (the sum of the elderly and younger age population divided by the working-age population) was 55.2 percent. In terms of their proportion of the total population, the elderly have surpassed the younger age group since 1997."

Here's a chart showing the demographic shift from the same report:

By 2050, basically less than half of the population (those between 20 and 65 years of age) will be working to support nearly 40% of the population. As we well know, with age comes increased reliance on the social network of any country. Poorer health requires more frequent visits to the doctor and increased hospital admissions. From these statistical estimates, we can see that a smaller proportion of the population will be responsible for funding the increased need for health care of a greater proportion of the population.

Apparently, the Japanese have very efficiently and thoroughly studied this issue. The National Institute of Population and Social Security Research has posted this study on their website showing their population projections for the future. Here is a chart summarizing their findings:

Here's a quote from the text of the study:

"According to the 2000 population census, the base year of this projection, the total population of Japan was 126.93 million. Based on the results of the medium variant projection, the population is expected to gradually increase in subsequent years, reaching its peak of 127.74 million in 2006, then enter a longstanding depopulation process. The population is expected to drop to the current size by 2013, then decrease to about 100.6 million in 2050
Based on the results of the high variant projection, the gross population is expected to reach its peak in 2009 at 128.15 million, a little later than the medium variant projection. A downward turn is expected subsequently, reaching 108.25 million in 2050.
Based on the results of the low variant projection, the total population is expected to reach its peak of 127.48 million in 2004, then subsequently decrease to 92.03 million in 2050.
These projections show that Japan will soon enter into the era of population decline, bringing the trend of population increase to an end. The fact that the fertility rate has been far below the level required to maintain the stationary population (population replacement level, total fertility rate requires approximately 2.08) since the mid-70s, together with the low-fertility rate trend continuing for a quarter-century, make the depopulation which start at the beginning of this century almost inevitable.

Secondly, let's take a look at Japan's debt situation.

Japan has a gross public debt estimated to be 862 trillion yen ($10.14 trillion US) by the end of fiscal 2010 which is estimated to be 197.2% of their GDP, the second highest debt-to-GDP ratio in the world after that pillar of fiscal strength, Zimbabwe. Please note that I have used a conversion rate of 85 yen to the USD throughout this analysis.

From their 2009 Fiscal Condition document, they show the following chart and graph. Note the rapid climb in their debt-to-GDP ratio since 1995 when their ratio was not that much worse than that seen in other developed nations:

The document also contains the following chart showing their growing debt level over the past three years:

As well, Japan's external debt (owed to outsiders) totals $2.132 trillion, eighth highest in the world.

According to their 2010 fiscal year Budget, 22.4% of the total 2010 fiscal year budget will be spent on National Debt Service. This amounts to 20,649 billion yen or $243 billion dollars, still quite a bit lower than the United States which is currently spending around $400 billion annually on interest payments. Here's the chart from Japan's 2010 budget showing the expenditure breakdown:

Fortunately for Japan, their interest rates have been very low since 1993; according to the Bank of Japan website, their discount rate has ranged from a high of 2.5% in 1993, dropping to 1% in 1995 and remaining between 0.75% and 0.10% from September 1995 to the present. While world-wide central bank rates are now in the sub-single digit range, that has only been a relatively recent phenomena. Japan's protracted period of low interest rates have helped their economy by adding a smaller interest component to their overall government debt.

In July 2010, even the International Monetary Fund warned Japan that they must rein in their high public debt-to-GDP ratio as soon as possible. Their recommendation is that Japan gradually in crease their consumption tax to reduce the risk to their sovereign debt.

Lastly, let's take a brief look at deflation in Japan.

The Japanese economy has suffered from deflation off and on since 1995 and pretty much consistently with occasional positive monthly inflation numbers since 1999. Monthly inflation rates have been as low as -2.53% as recently as October 2009. While dropping prices seem like a dream come true to consumers, they are considered a nightmare by economists. When consumers assume that prices will drop in the future, they tend to put off purchasing items because they know that the same item will likely be cheaper in the future. This results in a drop in economic indicators, especially in the case of Japan where 60% of GDP is related to consumer spending. Indirect evidence of deflation can be seen in the Bank of Japan discount rates over the past 15 years as noted above. Japan has deliberately tried to reflate its economy by maintaining a protracted period of very low interest rates.

Here's a chart showing Japan's inflation rate over the past from the indexmundi website:

From these statistics, we can see how well entrenched deflation is in the Japanese economy.

From this posting, I hope that you can see that Japan's economy faces a rather unique "perfect storm". Many other OECD nations will face similar issues with demography, debt or deflation, however, Japan is in the unique situation of facing all three issues at the same time.

Sunday, August 29, 2010

The $5000 House - Fact or Fiction?

Late August's news that sales of previously owned homes in the United States fell 27.2% from June to July brought sales to the lowest level since the National Association of Realtors started keeping records in 1999. This has stoked fears of renewed weakness in the national housing market. Despite the recent drop in mortgage rates which has pushed rates to 50 year lows, buyers are reluctant to enter the market because of weaknesses in employment.

This story reminded me of something that I recalled reading a year ago about the Detroit housing market. I seemed to remember reading about houses that were selling for well less than a thousand dollars; I thought perhaps it was worth another look to see if the market had improved so I took a quick look through listings for Detroit on the National Association of Realtors website. At one time, Detroit had one of the highest owner-occupied housing rates in the United States. As well, single family dwellings dominated the city's housing market rather than high-rise apartment buildings commonly found in other major American cities. Home ownership is no longer the case; data now shows that Detroit has the lowest ownership rate for single detached homes in the 20 largest American cities.

I went through the listings and picked out a couple of houses that didn't look too shabby. I tried to pick houses that had photographs of the interior of the house; quite a number of homes have only a photo of the exterior and a surprising number of them are described as "fire damaged" so I skipped right past those and selected some respectable looking dwellings. I can't speak for the neighbourhood or the quality of the neighbours but this will give you an idea of the physical appearance of the houses for sale. I did have additional screen caps and views from Google Street View but I'm pretty sure Google took them off for me. You'd wonder why - my posting might have sold a couple of houses for a Detroit-based realtor!

Here they are in order of price:

There are over 1200 Detroit properties listed at a selling price of less than $10,000 on the realtor.com website (a few of the really cheap ones are rentals so my number is a bit off) . Many of the listings are HUD (U.S. Housing and Urban Development) homes and bank-owned foreclosures and some of the really low-priced homes have been fire damaged. What is surprising is that some of the houses look quite acceptable. Here's an example of a nicer home located at 18233 Winston - again, I can't speak for the neighbourhood other than a brief look at the Google Earth Street View but the house itself looks well maintained from the interior photos supplied. It's not like there was tumbleweed blowing down the streets and from what I can see, the neighbouring houses look respectable as well.

Detroit's real estate market has been on a downward spiral for several years. The drop in the population of Detroit has markedly affected the housing market. Detroit's population peaked at 1.849 million residents in the early 1950's and dropped to 871,121 by 2006 according to theUnited States Census Bureau. As a reflection of the change in population and demand for housing, HUD home prices have dropped from an average of $46,702 in 2003 to $6,035 in the first month of 2009 With HUD having 3992 properties in Detroit, apparently they own a lot of cheap real estate. According to a study entitled the "6th Annual Demographia International Housing Affordability Survey 2010" completed by Demographia using data from the third quarter of 2009, metropolitan Detroit, Michigan has the most affordable housing market for home buyers in the United States, Canada, Australia, New Zealand, Ireland and the United Kingdom. In fact, houses in Detroit are the most affordable in the six year history of the survey. For your information, Demographia calculates affordability by using the median house price divided by gross annual median household income. Incidentally, the city with the least affordable housing in the countries surveyed is Vancouver, Canada with a median multiple of 9.3 compared to Detroit's 1.6. Here's a chart showing the affordability of the top 85 markets in the nations examined by Demographia:

Apparently, this affordability has not gone unnoticed. Investors from around the world are buying multiple dwellings in single transactions; some are buying as many as 100 or more houses at one time. Some city officials are concerned about the concentration of housing in the hands of absentee landlords. Many feel that today's problems exist because of the 1960's exodus of white homeowners to the suburbs prior to and following the 1967 riot. These homeowners often bought new houses in suburban Detroit but kept their properties in the city and rented them out. As well, a HUD program that allowed purchasers to buy homes with no down payment certainly made it easier for the purchaser to walk away when the value of their mortgage exceeded the value of their property. With many houses selling for well less than $10,000, that is not hard to understand.

While the reasons for Detroit's real estate market collapse are most likely unique to the city itself, it is still very sad and disturbing when one considers that each of these homes was, at one time, a family's pride and joy.

Update: September 13th, 2010

Detroit city officials are planning to hold a series of meetings that will assist urban planners in their efforts to move the city forward. As it stands now, up to 10,000 homes will be demolished by 2013 starting with 3000 this year. Currently, the city does not plan to demolish entire neighbourhoods, rather, portions of the streets affected by demolition could be used to establish green spaces.


Friday, August 27, 2010

Greenland - apparently not the new frontier for BP

In Thursday's Guardian, BP confirmed that they will no longer participate in the next bid round for offshore exploration licences in Greenland. Apparently, both the Greenland government and BP agreed that it would not be prudent for BP to be involved in the bidding process for offshore oil and gas licenses in light of the Gulf of Mexico debacle although the Greenland Bureau of Minerals and Petroleum would not confirm the agreement. BP is currently active in other Arctic areas, primarily in Prudhoe Bay in Alaska where they have experienced a series of environmental issues related to oil spills and pipeline corrosion including a March 2006 spill of 201,000 gallons of oil. Trouble does seem to follow BP.

This development is of interest especially in light of August 24th's update from Cairn Energy where the company announced that they had discovered natural gas in thin sands at their T8-1 well located in the Baffin Bay Basin, the first hydrocarbons discovered in the basin. Cairn is currently operating two offshore rigs in the previously undrilled Baffin Bay Basin, located between the west coast of Greenland and the east coast of Baffin Island. Cairn is also active in other areas of Greenland; they have planned the acquisition of 2500 kilometres of 2D seismic in one exploration area and acquisition of 7500 kilometres of 2D seismic in southern Greenland is already underway. The two wells being drilled by Cairn are part of a four exploration well program approved by the Greenland Government for the Sigguk block in water depths of 300 to 500 metres with targeted drilling depths of up to 4200 metres.

Here's a map from the Cairn website showing their eight hydrocarbon licences in Greenland's offshore:

Greenpeace is already active in the Cairn exploration area where they have been attempting to sail their Esperanza protest boat to the offshore rigs being used to drill the two wells. A Danish Thetis-class warship was sent to confront the Greenpeace vessel outside the 500 metre exclusion zone around the Stena Don rig.

The United States Geoplgical Survey has completed several reports on Greenland's hydrocarbon potential. In its report "Assessment of Undiscovered Oil and Gas Resources of the East Greenland Rift Basins Province", the USGS concludes that the basins on the east side of Greenland contain approximately 31.4 billion barrels of oil equivalent (MMBOE) comprised of oil, natural gas and natural gas liquids. In a similar study entitled "Assessment of Undiscovered Oil and Gas Resources of the West Greenland - East Canada Province, 2008", the USGS has estimated that those portions of the Province on Greenland's west coast that are north of the Arctic Circle contain an estimated 7.275 billion barrels of oil, 51.816 TCF of natural gas and 1.152 billion barrels of natural gas liquids. This Province includes the Baffin Bay Basin where Cairn is currently drilling its two wells. From the Greenland Bureau of Minerals and Petroleum, here's a map showing the current licences that have been granted for mineral exploration for both onshore and offshore areas. To put the size of these reserves into perspective, according to the Energy Information Administration, at the beginning of 2009, the United States had proved oil reserves of 21.317 billion barrels and proved natural gas reserves of 237.7 TCF according to the Oil and Gas Journal.

Here's a map showing geography and assessment units used by the USGS to estimate the petroleum and natural gas potential of the West Greenland - East Canada Province where Cairn is active. The Baffin Bay (AU-4) unit has a mean oil reserve estimate of 1.555 billion barrels of oil and 12.272 TCF of natural gas.

In other BP-related news, in late July, ExxonMobil, BP and Imperial Oil (Canadian subsidiary of ExxonMobil) announced that they have formed a joint venture to explore for oil and gas in Canada's Beaufort Sea located off the north shore of Canada. The drilling leases are located between 120 and 150 kilometres offshore and are located in water between 200 and 4000 feet deep. Both companies will be pooling their leases and have already completed 3D seismic surveys. ExxonMobil and Imperial Oil will each hold a 25% interest and BP will hold a 50% interest. Fortunately, Canada's National Energy Board is reviewing offshore drilling operations as a result of BP's Macondo spill in the Gulf and the new joint venture partners will need approval from the NEB prior to drilling and no drilling is likely before 2014. A major problem with drilling in Arctic climates is the time taken to drill relief wells; it is estimated that it could take up to three years to drill a relief well since ice conditions preclude drilling for more than 50 to 85 days in any given year. As well, while scientists estimate that approximately 25 percent of the oil spilled from BP's Macondo well in the Gulf of Mexico has evaporated, the cold climate in the Arctic precludes that method of spill cleanup.

We'll be watching the National Energy Board in the coming weeks and months as they seek public input as they review drilling requirements and look at what safety and environmental rules are necessary before oil companies are once again drilling offshore wells in Canada's environmentally fragile Arctic.


Thursday, August 26, 2010

United States - Waiting on a debt downgrade?

Update: September 20th, 2010.

According to the TreasuryDirect website, the total United States public debt outstanding has now reached a rather staggering $13,464,896,653,374.11. The interest expense for the first 11 months of fiscal 2010 is now $395,768,649,928.52. Only 22 countries in the world have GDPs that are greater than the annual amount of interest on the United States' public debt.

Original Posting

With Wednesday August 24th's announcement that Standard and Poor's Ratings Services had downgraded Ireland's sovereign debt by one notch from AA to AA minus on the eve of their 400 to 600 million euro debt offering, I thought it was time to take a look at American sovereign debt.

Back on August 17th, 2010, Moody's Investor Service announced that, while the United States debt is currently "stable" at a Triple-A rating, their sovereign debt and the sovereign debt of other major Western Nations particularly Great Britain, have moved closer to being downgraded. To quote the report, their ratings are currently "stable" but their "distance-to-downgrade" has substantially diminished in all cases. The United States was first assessed with a Triple-A rating back in 1949.

While this may seem unimportant to the average American, it is similar to having your personal creditworthiness found to be of concern by your local bank. As in the case of individuals, having a poorer credit rating will typically mean that lenders and investors will demand a higher return (interest rate) on their investments (loans) in that countries debt (in United States Treasuries or British Gilts) since the chances of repayment of both interest and principle are diminished. These higher interest rates add to a country's overall burden of debt which often result in tax increases or reduced spending or a combination of the two. If interest payments on the debt increase and a government is already running a large annual budget deficit, increasing amounts of interest debt will accumulate. The great fear is that deficits will become structural, that is, no matter how broadly and quickly an economy grows, growth in revenue never exceeds growth in deficits.

Sovereign debt downgrades are not without precedent. In May 2009, Moody's cut Japan's Aaa rating by 2 notches to Aa2 because of Japan's huge public debt burden which, at $9.7 trillion, is estimated to be 189% of the country's gross domestic product in 2009, making Japan the most indebted nation in the OECD. In mid-June 2010, Moody's slashed Greece's sovereign debt ratings from A3 to Ba1, essentially relegating it to junk status. At the end of June, Moody's also threatened to cut Spain's Aaa rating by one or two notches because of slow economic growth; Spain's rating had already been cut two notches by Standard and Poor's Ratings Services.

Let's take a look at the United States debt situation. Fortunately, the United States Department of the Treasury has a website for the Bureau of the Public Debt (BPD) which has a wealth (pardon the rather weak pun) of information regarding the debt situation in the United States. One of the great things they have on their website is a button that you can click on showing the U.S. public debt to the penny. When I clicked on it on Wednesday while I was working on this posting, it showed that the debt stood at $13,371,301,700,295.28 on August 24th, 2010. You can also search the debt by date to see how much it is growing; records are available back to January 1993 when, incidentally, the total public debt stood at $4,167.872,986,583.67. As well, you can get monthly schedules of the debt, how much debt is held by the American public and how much interest is being paid on the debt. In fact, the annual interest being paid on the debt is larger than the individual GDP numbers for many countries including Sweden, Norway, Saudi Arabia and Taiwan.

In looking through the Financial Audit completed by the BPD for the 2008 and 2009 fiscal years, I found the following information:

Here's another interesting chart showing just how much interest is being paid on the public debt on an annual basis.

To me, the most interesting part of the website is the donations section. You can actually make a contribution to reduce the public debt here. What I found particularly interesting about this was that donations could be made by credit card. Is it ironic that we can use credit to pay off credit or is it just me that finds it amusing?

According to this website, there are 576 million credit cards in circulation in the United States as of the end of 2009. Let's assume that we divide the total United States public debt evenly among all those credit cards. Each of those credit cards would have to assume a $23,189 balance just to pay off the public debt. How many of those 576 million credit cards does your family hold and what would your share be? As it stands now, on a per capita basis, each of the 307,006,550 American residents would have to pay $43,555 just to pay off the outstanding Federal debt with or without credit cards.

Sobering, isn't it? On the upside, think of the travel miles and other loyalty points we'd all get if we paid off all American public debt using our personal credit cards!


While I can't speak to it's accuracy, I used the CIA World Factbook for consistency when comparing debt to GDP ratios. Unfortunately, with so many sources available, economic statistics vary widely with the source used. I felt that at least I was being consistent by using the same source throughout this posting. For specific United States debt data, I used the Bureau of Public Debt website since it is obviously the most accurate.

Wednesday, August 25, 2010

Top Free at last, top free at last!

I apologize. I missed an important bit of news from Sunday August 24th; I'll blame it on the fact that I generally don't blog on the weekend.

Apparently, Sunday was the "National Go Topless Protest" day. According to their website, gotopless.org, gotopless.org is a "...US organization, claiming that women have the same constitutional right to be bare chested in public places as men.". Apparently, on Sunday, great numbers of women were expected to go topless across the USA to protest the gross inequity in the law and demand that their rights granted under the 14th amendment of the Constitution be acknowledged.

For your information, according to the website, Maitreya Rael is the spiritual leader and founder of gotopless.org. To many of you, this name will be meaningless, however, I just had to find out more about this person who I naturally assumed was female, especially since the surname seemed so familiar. Maitreya Rael is, in fact, the founder and spiritual leader of the International Raelian movement whose real name was Claude Vorilhon. He was a former French auto racing journalist and professional race car driver. who had a life-changing experience. In 1973, he had an encounter with a human being from another planet; this extra-terrestrial being named Yahweh gave him details about the origins of the human race and how the future was to be organized. All of this was being done in preparation so that humanity would welcome their Creators, the Elohim, without fear. The roughly 70,000 Raelian members are now in the process of preparing to build a $37 million Embassy complete with a UFO landing pad for the Creators who are expected to return before 2035. To read more, you can find their website here and their news website here. The Raelians have also founded Clonaid; they are very focussed on cloning human beings and claimed to have cloned the first human back in February 2004 which they named "Eve".

If you want more information about Rael and would prefer to watch rather than read, here's a YouTube video explaining the movement.

Anyway, back to the story at hand. Sorry for the distraction from the original intent of this posting but I thought it would be best to put the organization behind the topless protest into perspective. Let's just say that the Raelians were the last people on earth that I would have expected to be the backers of the "National Go Topless Protest" day!

According to the gotopless.org website, their protest is held in August in celebration of the August 26th, 1920 constitutional amendment date when women were granted the right to vote. As well, in 1970, Congress designated August 26th as "Women's Equality Day" as a reminder of women's equality.

Here's a quote from their website that I particularly like:

"How are we helping men? GoTopless is also committed to helping men differentiate between nudity and sexuality. If the presence of a topless woman in public triggers a sexual impulse, it can easily be controlled in the same way men control themselves when they see a woman wearing a mini skirt or revealing ample cleavage. Men manage to appreciate these things while still showing respect! Choosing consciousness above hormones leads to a peaceful, respectful society providing additional freedom and beauty."

While I admire the sentiment and the effort that the group is making, as a man, I'd have to say that the battle between hormones and consciousness has already been fought....and the hormones won easily. Sorry ladies, it's just a fact of life. I wish I could say otherwise, but it would be a bald-faced lie. In fact, most men regard a pair of geometrically pleasing breasts in the same manner that the children of Hamlin regarded the piper; we'd follow them pretty much anywhere.

As for the day of protest, according to the Guardian, about two dozen women showed up at Venice Beach, California along with a scrum of male photographers (no surprise there). According to the New York Daily News, dozens of women showed up at Central Park in New York City where, surprisingly enough, it has been legal for women to be topless in public since 1992! Protests were also planned for Miami Beach, Chicago, Denver and Columbus, Ohio among other cities. I thought that Columbus was a rather odd choice but apparently, in Ohio, breasts are not considered "private parts" so exposing them is not considered indecent exposure. For my Canadian readers, Ontario became legally "top free" in 1996 thanks to a criminal court challenge by Gwen Jacob. There is even a Canadian association that helps women who encounter difficulty going without tops in public places in Canada. The website for Topfree Equal Rights Association (TERA) can be found here.

I'll be following this story next August, hopefully this time, before the protest happens.

...and while men do have the constitutional right to be "top free", quite honestly, there are many, many men who should resist the temptation to take off their shirts in public as some things are best left to one's imagination...if that.