davejh23 (< 20)

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Japanese and US Stocks...are US stocks set to crash?

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June 14, 2011 – Comments (4) | RELATED TICKERS: CR , A , SH

Click on this link to see a very interesting chart. Continuing weakness in the dollar may protect US markets from a 60% crash, but still, as the author mentions, this is "pretty scary stuff".

http://www.zerohedge.com/article/japanese-and-us-stocks-bernanke-footprint

4 Comments – Post Your Own

#1) On June 14, 2011 at 3:56 PM, awallejr (84.39) wrote:

Dave, Dave, Dave, charts only tell you what happened, not what will happen, until after it happens, then you can say see it happend or not.

The author of your link opens his article arguing that Japan and the US are similar. They aren't. There may be some similarities, but don't ignore the differences. The US population is growing, Japan's is not. The US economy is 8 times the size of Japan's if I recall.

But then again, you wouldn't be you without arguing things are going to crash. Going on year 3 now hearing that song while watching the market rise, correct, rise, correct, rise correct.

Now what really is scary is if Congress lets the US defualt come August 2. I sure hope the first bills not to be paid will be Congressional salaries.

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#2) On June 14, 2011 at 4:06 PM, portefeuille (99.74) wrote:

The US economy is 8 times the size of Japan's if I recall.

The GDP (PPP) ratio was less than 4 for 2010.

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#3) On June 14, 2011 at 4:27 PM, davejh23 (< 20) wrote:

awallejr - I agree that there are clear differences between the Japanese and US economies. However, the same differences existed 10 years ago and, with a lag, the US/Japanese stock markets have tracked almost perfectly. To dismiss the correlation outright seems unwise. Of course, I don't dismiss the possibility of US stocks climbing much farther before crashing like they did last time. Short term technical indicators are signaling a possible bounce, but longer term technicals are still showing weakness. You also should keep in mind that the US economy lacks some of the strengths of the Japanese economy...a nation of savers, robust manufacturing, etc... They also don't have near 20% unemployment and a significant percentage of their population on food stamps.

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#4) On June 14, 2011 at 4:39 PM, awallejr (84.39) wrote:

I always dismiss correlations in general as future predictors. A correlation continues until the correlation changes. Correlations are not causations. I am more concerned with causative, since, well that causes.

To suggest that because some past pattern has happened it must therefore continue simply ignores the unknowns of the future.

And Porte I stand corrected.

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