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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Mike M2 who wrote (245947)6/17/2003 2:04:38 PM
From: Perspective  Read Replies (3) of 436258
 
A time compressed view of US markets vs. Japanese markets.

Apologies in advance for the low quality images; my image editing software sucks.

ttrader.com

This image shows a time compressed view of the Nasdaq and Fed Funds. Our Fed has basically followed the Japanese authorities to the letter, but they've made all their moves in half the time. There was the initial hike that burst the bubble, then the pause while markets began correcting, then a vigorous easing cycle. Took two years in Japan, one in the US. Then a pause to see the effects. When markets tanked to new lows again, both authorities resorted to further cuts (1995 in Japan, late 2002 in US). Again, it took half as long in the US experience. The final cuts to near-zero in 1995 Japan produced the biggest cyclical bull of the secular bear, lasting just over a year. We are nearing the one-year mark in our own cyclical bull, produced by the correlated double rate cut to near zero, assuming the Fed does as expected next week.

The big question is - are the reflationary efforts going to be any more successful here. If they are, it could mean that the cylical bull extends. If not, it would die very soon if the Nikkei roadmap continues in force.

BC
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