John Pitera's Market Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Jon Koplik who wrote (6998)	7/18/2003 7:15:49 AM
From: macavity	Read Replies (1) of 33421

JGB's - The beginning of the end. These are going to be a great watch in the coming 6-24 months. IMO the Japanese Bond Market has peaked and we are witnessing the birth of the new rally in Japan. I am not able to view the data (on Bloomberg) and I have now left Japan, but when I looked at stuff about a month ago I was staggered. Bonds Bond yields appear to have retested support at 10Y~0.45% which was also the low in 1998. A 5 year double bottom? Perhaps. I have no idea where the neckline is/was but any decline in yields here/rally in bonds should be sold IMO. Stocks Here was the biggest surprise. A lot of major stocks were at 3 and 5 year highs (in JPY). I am not kidding. Nissan broke above 1000JPY - its 5 year high. When you take out BANKING and CONSTRUCTION out of the Nikkei/Topix most other sectors did not confirm the low this year. In fact a lot of them are above flat/upwardly sloping 1Yr MAs. Why is this The Bottom? Major bet is psychology. Banks (Resona) are being forced to puke their positions. Everybody hates JAPAN. I cannot get data, but there is a hidden BULL market going on there (exc. construction and banking). Rates rising will force liquidation by banks of bad loans and credit which will force them to close out bad positions. New capital will be attracted into Japan and will be more demanding. The vulture funds will begin to clean up. Middle-sized companies have no access to capital as they are being denied it by the bankrupt financial system and they cannot disintermediate the banking system (as in the US) and head for the capital markets (yet!). There is one hell of alot to do with a cost of capital of 1% p.a. Rising rates will demonstrate that there is a current excess of (real) borrowers to (captive) savers. They will have real capital projects to invest in unlike the phony construction companies. Over the next 2 years we will see Japan leave (slowly) its K-Cycle winter and enter its K-Cycle Spring. It is still a dual market: Inefficient protected domestic markets : BANKING and CONSTRUCTION Efficient companies with external markets : AUTO, DRUGS AND ELECTRONICS. -macavity

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next