Tokyo, just as we speak, has fallen prey to another recession. Japanese GDP came in at -1.6% despite their efforts in flooding the world with a lot of money. Here’s the Nikkei:
Japanese Premier Shinzo Abe wanted to increase a recently increased sales tax to perk up GDP. What a sales tax should do do is make things more expensive and in some random way impact inflation. But it will increase GDP too, or so they hoped. But apparently it did not, so further hiking it may be out of the question.
Japan’s become a basket case in economics. No GDP growth, no inflation, the stock market refuses to hit new all time highs no matter how much money is printed, protection of the top houses, the central bank buying equities, their pension fund increasing equity allocations, the presence of a massive carry trade which on unwinding can hurt…in the words of John Mauldin, a bug looking for a windshield.
However, there is a record amount of money that has been printed all over the world. You never know when things can turn, and short positions all over the world have been mauled to death. To the extent that in India, even dabba-operators (Bucket trading, i.e without actually placing the trade in the market, effectively a gamble on the position) have stopped accepting orders, because a book requires players on both sides of the market, and everyone has only been going long (and winning).
No one-sided trade has lasted too long. How long, though, is a matter of conjecture. I’m holding tight and am ready to jump off on a trailing stop loss.
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