RD, whoa! the Japanese blow-off lasted a whole year! it began in January '89, and topped exactly on the last trading day that year. there was only one, relatively short-lived and shallow correction. all but the most resourceful shorts were wiped out...and the market withstood multiple rate hikes. 10-year JGB's yielded over 8% when it topped out.
the subsequent crash was equally relentless...within a year, the market plummeted by 50%. after the initial decline there was one sucker's rally which was the absolutely last chance to get out, otherwise it just kept on going down, day after day after day, an exact mirror image of the preceding blow-off.
btw, for all those trusting that the Fed will be able to prevent a similar occurrence here, no way! this thing has already a dynamic of it's own...it will simply play out to the bitter end. note that in Japan, interest rates went even negative for a time after the bursting of the bubble, and the BoJ did what it could to pump liquidity into the system, and yet the market never recovered. 10 years hence, it remains 60% below it's peak.
regards,
hb |
