The Panic Spreads

[Charles Jannuzi]

Another thing to think about when grappling with Japan's 'lost' decade vs.
US's new economy.
I believe if you start back far enough (11 years?) and track growth in
overall GDP you see stagnant Japan has virtually tied the vibrant,
productive US.
The only areas where the two economies consistently diverge is the value of
their currency and the capitalization of their stock markets (even before
the recent fall below 10,000 for the Nikkei, the UK's stock market cap. was
twice Japan's!).

The US likes a cheap dollar versus the yen because, why? Well, because not
only does it make Japanese exports to the US expensive (especially vs.
exports from China, Korea, Taiwan, many owned or at least marketed by US
companies). But it also wipes out the value of the money the US owes the
Japanese--think about the soaking the Japanese have taken on US bonds
because of a constantly devaluing dollar.

It's Sunday, which always gets me thinking of new ways to relate terms.

Enron executives=Ponzis with MBAs.

Charles Jannuzi