Doomer Doug spent last night posting at Timebomb2000.com during what can only be called total market chaos in Japan’s Nikkei 225.
The market low on Friday was around 14,000 points. The market high was around 15,000 points. THIS IS A 1000 POINT SWING IN ONE TRADING SESSION!
In the first part of the session the Nikkei went up around 3 percent. In the first two hours of the afternoon session it went down around 3 percent. In the last HOUR of the afternoon session a truly amazing thing happened. If you look at the graph you will see it looks like a drunk using an etch-a-sketch. The graph circles around for one half hour. At precisely one half hour before the 3 pm close it spikes up some 400 points. The eventual close was .89 percent up from the market open.
Japan’s Nikkei Stock Market is not designed for this level of near total chaos. No stock market in the world is designed for this level of market volatility.
It will be interesting to see what happens when the market opens next week.
Japan is really taking it on the chin. First, they are dealing with the ongoing, multi-generational toxic radiation release from Fukushima. This will redefine life in Japan for the next several decades at a minimum.
Japan’s economy is also being crushed by debt. The “flash crash” of the Nikkei is a case in point. Japan’s Nikkei stock market is currently at the 15,000 point level, even after losing over 1000 points. The Greek philosopher Socrates said a person needed to “define their terms.” Context is EVERYTHING in figuring out what is really happening. The context is the Nikkei peaked at nearly 40,000 points in late 1989. Since then, it has lost 25,000 points in the last 20 plus years. This is a 60 percent loss of the total value it had in late 1989. This loss has been permanent and shows no sign of getting back to 40,000 any time soon.
By the way, the American NASDAQ peaked at 5200 and change in March of 2000. It has also permanently lost roughly one half of that value. The media shills ranting about Nasdaq rallies have no idea of what they are talking about. When the Nasdaq “increases from 2000 to 2500 it means nothing. The Nasdaq has been trading at 50 percent less for the last 13 years. How is that for long term investment? People should understand that the DOW took until 1954 to recover from the 1933 lows.
At any rate, Japan is on target to repeat the 1989 crash cycle. They have a 85 percent increase over the last six months or so. They have just had a massive crash that roughly equals 9 percent. The key issue is what happens now. Doomer Doug will only say that a massively indebted country like Japan can’t stimulate its way out of this. Japan is pretty much finished as a modern country due to Fukushima. After all, if you get radiation exposure by living in Tokyo then the stock market really doesn’t matter much.