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John Thomas graduated with a bachelor’s degree in biochemistry with honors and a minor in mathematics from the University of California at Los Angeles (U.C.L.A.) in 1974. He moved to Tokyo, Japan where he was employed by a medium-sized Japanese securities house. Thomas became fluent in Japanese... More
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  • Japan: When Terrible is Good 0 comments
    May 21, 2009 9:34 AM | about stocks: AAXJ, DNL, JEQ

    You know things are bad when traders celebrate a Q1 GDP of minus 4%, better than the 4.4% that had been forecast, but still the worst in history. The main causes were a 26% decline in exports and a strong yen, which diluted foreign profits. Apparently, people don’t rush out and buy a new Lexus when they lose their jobs. Many economists are hoping for a recovery when the government’s $160 billion stimulus package hits seriously pared back inventories. However,  global asset allocators are facing a larger quandary. What is Japan’s role in the “new” world? It is not an emerging market, nor is it Europe or the US. It is on the doorstep of the world’s worst demographic problem, and its labor is not exactly cheap. But chastened by its own financial crisis that started 20 years ago, it has some of the few global banks left standing, as well as some world beating companies, and a great neighborhood customer in China. As American power declines, will it fall into the Chinese orbit? Maybe country allocations don’t matter anymore. Until either the Japanese or I figure this out, I’d rather stand aside. This is coming from someone who lived there ten years.
     

    Stocks: AAXJ, DNL, JEQ
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