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Why Look at Japan?



October 23, 2008 – Comments (10)

Mish has a post looking at Japan and their market after their incredible housing bubble in the late 80s, early 90s.

This buy and hold and long term investing theory has been a disaster for Japan. 

Japan has had better savings and better exports.

I think I need a more serious look at Japan...

I am thinking waiting for housing to come down and having a modest home clear and free is the way to go... 

10 Comments – Post Your Own

#1) On October 23, 2008 at 7:19 PM, dinodelaurentis (90.33) wrote:

always good advice dwot. "haste makes waste."

i'm something of a Nipponphile and i'm not so sure they know the way. they are having continuing problems with their economy and terrible fights over the role of their military in securing needed assets. yes, the Defense Forces may be deployed worldwide to guard oil shipments, and i can't imagine how the Chinese, Korean, or other Asian coutries will react to that. some folks still have memories about the last bout of Military Expansion from Japan 70 years ago. oh yeah, Russia too.

i'd be more optimistic about Japan if they had a better standing diplomaticaly in the world outside of Europe. and there's a lesson for the USA, too. nobody likes a bully.

at least everybody likes Canada. you guys are gonna be a happening place in 10 years, eh?  :D



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#2) On October 23, 2008 at 7:45 PM, kdakota630 (29.15) wrote:

What do you mean, "in 10 years"?!?  It's a 'happening' place now!

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#3) On October 23, 2008 at 8:58 PM, Harold71 (< 20) wrote:

Mish:  "You may not like it and you may think treasuries are a huge bubble, but secular lows in treasury yields are still on the horizon. The economic horizon is simply that bleak."

If it's that bleak why don't China and Japan pull the plug on the  US Dollar and use the money in their own economy.  There is a time for that...but my patience is wearing uber thin. 

Much like the stock market, when it tanks, the USD is going to tank hard.  Real quick and in a hurry, that's how these markets will trade it to a more fundamental valuation.  And markets tend to over-react, so it will probably go even lower than fundamentals dictate. 

Mish talks about the monetary base growing from bailouts, but that is offset by loan defaults.  Perhaps, but the real problem is the US economy itself is tanking but the National Debt is climbing at a rapid rate!  The US is not a good credit risk.  Bad credit risks don't get low interest rates as some kind of reward for their past carelessness and general stupidity!  The market, IMO, is wrong on the USD, but it is only wrong temporarily.  Like this manic-depressive market took 10 months to finally reach a conclusion of "Hmm we're seriously screwed here" and put in a major new low, it could take another 6-8 months to realize that the USD is about as sound as a subprime mortgage.  Neither one is going to pay you back, ever!

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#4) On October 23, 2008 at 9:18 PM, dwot (29.28) wrote:

Analysts are rubbish..

Short term historians might be a better term...

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#5) On October 23, 2008 at 10:22 PM, tz7bandit (< 20) wrote:

Thats the luxury of being the most powerful country in the get to make your own rules.

 National debt is irrelevant when no one can make you pay up.

 Besides we can alway plunder Canada.

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#6) On October 23, 2008 at 11:36 PM, Harold71 (< 20) wrote:

National debt is irrelevant when no one can make you pay up.

Haha!  You are drunk with pride, sir!  At this point in the game?  That's amazing!

Who told you that, Mr. "Deficits Don't Matter" Dick Cheney?  I hear he has a place in Dubai.  He's not going to stick around for the riots.

Wake up and smell the coffee.  Economically, China is the most powerful country in the world!  They own the US.  The only reason most Americans aren't living out of a car right now is a man in China that hasn't pressed SELL $1.3 trillion USD.  Respect!

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#7) On October 24, 2008 at 12:33 AM, dejonese (< 20) wrote:

japan has also had a declining population, and the fact their savings rate is so high has been the poison in their unsuspecting economy; in other words less people buying less. This translated into smaller profits and stagnation/deflation (which is only natural with the above mentioned circumstances). Now, you have to keep in mind that the US is a very materialistic nation. Wether through credit, or by some other means, our consumer will keep spending, not saving. 

But as Robert Kiyosaki  says, real estate is a great investment, as long as your tenant is paying for it. I know I would definitely stay out of the market with "real" money at least to the end of the year.

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#8) On October 24, 2008 at 12:48 AM, dwot (29.28) wrote:

Speaking of Japan, they are down another 600...

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#9) On October 24, 2008 at 1:17 AM, Harold71 (< 20) wrote:

Wether through credit, or by some other means, our consumer will keep spending, not saving. 

After all the credit is gone, and long-term interest rates have spiked, crushing home values to the ground, how exactly do you propose to keep this dead consumer spending?  The housing ATM is gone.  Where is this pixie dust that Americans sprinkle on themselves that allows them to spend?

A healty economy is not built on debt and consumption.  It is built on savings and production.  I recommend you read some books by Peter Schiff...he's kinda good.

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#10) On October 24, 2008 at 2:31 AM, dwot (29.28) wrote:

Yikes... showing down 811 now...

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