Friday, February 13, 2009

The Times and "We are Japan"; and Yamada in India

The New York Times has published two articles on a topic discussed here almost daily. The main article is: Ailing Banks May Require More Aid to Keep Solvent: Experts say the situation at some of the nation’s banks demands a more direct government role than in the plan outlined this week.

What is old news in the blogosphere is getting out, gradually, in the main-stream media (MSM). Better late than never.

The secondary article is more interesting to this blogger: In Japan’s Stagnant Decade, Cautionary Tales for America.

This article makes the Japanese experience appear worse to the man in the street than it actually was, but it does make the point made here in Land of the Setting Sun.

That post began: "We are Japan". The main reason is the insolvency or near-insolvency of the large financial institutions, and the reluctance of the powers-that-be to take decisive steps to wipe them out and move on.

When the New York Times and rest of the MSM actually catch up to ordinary Americans and celebrate the virtues of thrift and saving, criticize unnecessary risk-taking, and stop focusing endlessly on "growth" as the most important goal, then not only will this be a healthier society, but the stock market is likely by then to be a "buy". For now, there's lots of change needed in the American ethos.

From a global thematic perspective, perhaps the large economy most suited to grow despite the woes of the consuming Western countries and their suppliers is India. The thematic technical analyst who most accurately predicted the structural ("long-term) bear market in 2000 as well as the buying opportunity in 2003 and selling opportunity in 2007 was Louise Yamada, who gave three days ago an interview from New York to CNBC India. She continues to see considerable risk of more downside price action in US stocks, believes gold is not technically ready to go to new highs and is uncertain even if it holds the $750-800 range in a correction, and is not bullish for now on oil. All this prognostication fits the "We are Japan" theme expressed here: a long-term economic and financial market problem.

Most workers have a 3-day weekend. Enjoy it. What will be, will be.

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