'Scary' Parallels with Japan

[duvinnie]

Wall Street Winners newsletter says the overlay is getting scary:

http://cbs.marketwatch.com/news/story.asp?guid=%7B97B80B10%2DAB38%2D4495%2D9689%2D409E5C206E7D%7D&siteid=mktw

[redqueen]

1. 'getting' scary?

I thought the parallel was scary a long time ago. :shrug:

[duvinnie]

5. yes, but...

what's scary is the immediate ramification.
if we look at the current standing of the S&P, and project it out the next few months based
on the Nikkei trendline, it shows plenty of trouble could lie ahead for stocks.

what I want to read is something that explains the underlying economic trends that
are causing this parallelism in the first place. but, do our economic think tanks
want to go there.?

[The_Casual_Observer]

2. It hasn't mattered a wit how low the interest rates are

or how many concessions they make to "industry". The economy in Japan, like that in the us is ultimately terminal, with the process accelerating due to this oil price shock

[On the Road]

3. Thanks for This

I'm convinced the other shoe has not yet dropped, either in the stock market or the economy. It's been a while since I heard a reference to the US-Japan parallel, but the trends are amazingly similar.

[rapier]

4. notes

The # 1 parrallel with Japan is the embrace of ultra low interest rates. Forget about the stock markets.

Ultra low rates haven't stopped Japanese growth stagnation but since no collapse has occured the flawed logic of their, and now our policy makers, is that ultra low interest rates work.

A logical case can be made that ultra low rates while preventing a sharper initial drop end up delaying the recovery. This is in fact what classic economics would say. It is what history may say about this period in the future as well.