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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (19786)	6/13/2002 11:33:25 PM
From: EL KABONG!!!	Respond to of 74559

Hohoho Jay, I know exactly what she means... I had the exact same feeling the other day myself. I also always start with the WSJ Interactive Edition, and I remember what's she talking about. By the way, I had the same feeling again this morning, with ImClone and Tyco and Enron and Andersen and Adelphia... It doesn't stop with the headlines. When I went to the "Markets" page, it was loaded down with similar stories... Seems to me as though the '90s was nothing more than corporate greed taken to its extreme... And now we pay for that greed... KJC

To: TobagoJack who wrote (19786)	6/14/2002 12:07:30 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

<KJC and I weren't talking about US, whose fiat paper you are loaded down with;0) We were talking about the Japanese.> Jay, I knew that. It just struck me that the list also applied to the USA. Neither has Japan suffered big deal losses to earthquakes and typhoons outside Kobe, which was only on the scale of WTC. Bigger, but similar scale. Whether Osama or earthquake does the damage, the economy doesn't know the difference. Malevolence always seems so much worse than natural destruction - partly because of the promise of more to come with will behind it. Nature is indifferent, which in a way is some consolation. I'm loaded down with fiat pixels. I don't even have the pleasure of holding a fistful of greenbacks which I could at least go down the street with and trade for food, cars, clothes and stuff. I hope the magnets on Uncle Al's computer don't demagnetize my pixels with accidental reverse polarity or anything silly like that. It took me a lot of effort to get those pixels on the screen. Yes, I know that is leaving a wide-open opportunity for you to point out the non-magnetic nature of Au phragmented CDMA photons which are impervious to Uncle Al's deliberate or inadvertent destructive ministrations. I know you REALLY would prefer to point out the non-magnetic nature of Au in Aztec form.... Mqurice PS: Off for a walk in 3D to see if the city is still there...

To: TobagoJack who wrote (19786)	6/14/2002 8:43:18 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Jay, Looks like Maurice is correct in noting the striking similarities between Japan and the US ... just as you did way back when ... Message 15135006 Message 15137009 ... and so without further delay ... economist.com Economic parallels between America and Japan Terrible twins? Jun 13th 2002 From The Economist print edition America's economy looks awfully like Japan's after its bubble burst JAPAN'S economy rebounded at an annual rate of 5.7% in the first quarter of this year, a shade faster than America's. Unfortunately, many economists distrust Japan's notoriously volatile statistics: they expect output to fall again in the current quarter. More than 12 years since Japan's stockmarket bubble burst in December 1989, its economy remains fragile. Meanwhile, America appears to have survived the bursting of its bubble in 2000 rather better—so far. The similarities between America's financial bubble in the 1990s and Japan's in the 1980s have been well rehearsed. In both cases, share prices and capital spending soared; households and companies went on a borrowing binge. Japan, like America a decade later, enjoyed a spurt in productivity growth, suggesting to some that it had a superior economic model. Yet the conventional wisdom now is that the economies have taken divergent paths since their bubbles burst. Thanks to resilient consumer spending, America is widely tipped to enjoy robust growth this year and next. Meanwhile, Japan is expected to languish in perpetual recession. Look again. America's economy over the past two years has in many ways mirrored the performance of Japan's immediately after its bubble burst (see charts). In the two years from December 1989, Japan's stockmarket fell by 40%, slightly more than the 33% fall in the S&P 500. Japan's economy held up well during those two years. GDP growth did not turn negative until 1992. Capital spending slowed sharply, but consumer spending continued to boom. In fact, property prices continued to rise strongly for two years after the stockmarket tumbled. This sounds like America today, since rising house prices have bolstered consumer spending. Economists argue that recent swift productivity growth points to robust recovery in America. Yet productivity growth in Japan was almost as brisk in 1990-91. America's troubles may still lie ahead. Another claim is that America's Federal Reserve has eased interest rates aggressively, whereas the Bank of Japan was slow to ease and so failed to prevent deflation. The Bank of Japan has been overly cautious in recent years; but criticism of the bank's policy in the early 1990s may be unfair. Deflation did not develop until the mid-1990s. In 1990-91, Japan had a higher inflation rate than America has today. Admittedly, Japan did not start to cut interest rates until 18 months after the stockmarket began to fall, whereas the Fed started only nine months after. Yet if monetary policies are considered in relation to growth rates, it is not clear that interest rates were cut more swiftly in America. As the lower chart shows, GDP growth was brisker in the early 1990s in Japan than it was in America last year. According to Stephen King, chief economist at HSBC, both the Bank of Japan and the Fed began to cut interest rates during the third consecutive quarter of below-trend growth. And what about one other popular argument in support of America's economic resilience? Japanese firms in the late 1980s used shady accounting practices to conceal financial problems. Now that could never happen in America.