I believe Japan has just printed a new 11 years or more low tonight, and yes, some six months ago, I mentioned that one of the future dangers will arise from excess capacity in Asia and a new SE Asian Malaise. In 1998, we escaped a world wide recession by opening our gates to their products (and now we have a $400 Billion/yearly trade deficit to show for that), this time, we have reached the limits of our generosity, and will not be able to act as "demand of l;ast resort" for the rest of the world, and thus, with appropriate delays (due to denials), we will suffer the consequences. Turkey is too small to impact our market, but Turkey is a symptom of problems elsewhere.
The hitting of new lows in Japan comes at a very "inappropriate time", in that by the end of next months they close their book and mark their book to market. You can be assured that within a week or two, a major PPT action will be called for in that market to bring it back above the 14,000, area, but, IMTO, that will be only a temporary situation.
Zeev |
