Well, just wow, gang. All Doomer Doug can say is wow. The Nikkei is now down over 510 points and 3.55 percent with two hours left in trading. The pump monkeys will no doubt make their fiat money known. They may even claw the market close up to near starting levels. But, you know what? It doesn’t really matter at this point. The level of chaos and volatility in the Nikkei in the last 4 trading sessions has done permanent damage to it. No sane investor is going to stay in a stock market that has 1000 point swings in one session. They will not stay in a market that loses 7 percent of its value in one day. Wall Street may even start to notice that things are not well in the land of Fukushima.
At any rate, tens of billions of dollars in market equity have been vaporized into cyberspace this last week.
One final thing, Bank of Japan leader Kuroda issued a statement saying that Japan’s banks are in great shape. The thing is Doomer Doug has come to understand these kind of statements. They are what John Kenneth Galbraith called “organized reassurance” in his book on the 1929 stock market crash. The fact that Mr. Kuroda feels compelled to say this means the opposite. When government officials tell you the banks are sound, the reality is the opposite.
It is clear that the stock market volatility in Japan is damaging the BOJ and all of Japan’s banks. This is the 1200 pound gorilla that nobody wants to talk about.