It will be a very big mistake to buy stock that have selling exposure to Japan at this time. the Japanese yen will not go above about 115/dollar at worst, IMHO, and if that happen at all, which I doubt, it will be just a spike, the Japanese yen is heading down re: to the dollar and eventually sometime next spring it will pierce 130 yen/$ , a price it has not seen in a long time. Furthermore, the same compamies that are selling to Japan are also selling to the rim, and there they can expect quarter over quarter declines of up to 25% in sales as more companies are delaying capital outlay for lack of money and overcapacity.
Last, while reducing taxes is what they need to do, do not expect them to do what they need to. They are known to be suicidal. They could have taken a tax reduction in concert with massive write off of phony loans on their banks' books three years ago, and they would not have gone through an additional three years of sub par growth nor be in the pickle they are in now. The big fuss few months back (when the finance minister "threatened" to flood the market with treasuries was as a result of their argument with Rubin and Clinton who probably told them, look cut your tax rates and open the door to some import, their response was proud, we do not need you guys with huge deficits to teach us how get an economy running back by fiscal stimulation (they did not want to say, however, that they really like the import insulation of their markets).
Zeev |
