NIKKEI vs S&P 500
For years I’ve made it no secret that I thought the US was going to follow Japan into a so called lost decade — of course it’s now more than a decade.
With the US stock market now apparently in a free fall I though this chart I’ve been keeping for years would prove of interest. In particular, note how nicely the two stock market major peaks and troughs seem to coincide. Is it more than just an interesting coincidence?
Certainly I have no idea as to the coincidence of the trajectories of the two market indices. Are they measures of the same phenomenon? What seems clear enough is that the S&P rating of US debt has no relationship to the value of equities. it is such a gross measure of economic activity as to be of little value in determining the value of equities on an individual basis. Look to the results of the turmoil. As the man once said, follow the money. In this case follow the profits. As I pointed out on another thread, someone is buying low and selling high. Was it short selling in a coordinated fashion? What is clear is that wealth is continuing to be transferred from our retirement funds to the manipulators. Maybe MG has some list of numbers that can enlighten us all regqrding the manipulation that we can clearly see occurring.
what would the correlation look like if you adjusted the indexes for each countries inflation? for FX?
just curious…
http://astrofibo.blogspot.com/2011/08/sp500-next-bear-low.html
Adjust for inflation.
There is this person: http://www.fingleton.net/?p=1182 having lived in Japan since 1985 that thinks people have it wrong on the “lost decade” argument regarding Japan. He suggests that do to Japan’s culture, you are not going to know the real numbers but looking at specific indicators they have done more than well.
There is this posting he titles: Translating Japan: http://www.fingleton.net/?p=1163#more-1163
This: http://www.fingleton.net/?p=1189#more-1189 give a summary of his argument.
I have to add, if Mr. Fingleton is correct in his argument about Japan’s status, then it does not speak well for the approaches we are taking. IOW, I can see US truly having the lost decade and more. Though we won’t be alone as England is well on it’s way. It might end up with Japan losing some.
I have to add, if Mr. Fingleton is correct in his argument about Japan’s status, then it does not speak well for the approaches we are taking. IOW, I can see US truly having the lost decade and more. Though we won’t be alone as England is well on it’s way. It might end up with Japan losing some.
Daniel Becker
someone I know who was there said they seemed to be taking it pretty well. i thought it was because they did not have the cultural need for MOAR MOAR MOAR that Americans are taught is the reason for living. Or maybe it’s because their nanny state keeps them out of desperate poverty.
sometimes it seems to me that if we are going to be governed by the money class we ought to try spending less and see what they do.
“Or maybe it’s because their nanny state keeps them out of desperate poverty.”
You mean like missing the financial bubble that almost collapsed the world economy, by not following the stupid deregulation of financials and banks that kept the USA safe for 30 years.
Stock market observations like this one are very interesting and thank you for sharing your work. Whether they demonstrate historical similarities or fractal theory, one has to wonder why this analysis isn’t given more attention. It provides a great framework for investors, although I wouldn’t be confident to trade just by its call.
I hope you get your due credit if the next few years pan out according to the charts.
Great chart. The demographic differences aren’t as great as they appear. They’re at work in every advanced economy with a baby boom ~10 years behind Japan’s:
http://symmetrycapital.net/index.php/blog/2010/07/new-idle-speculator-an-interview-with-diane-macunovich/
http://symmetrycapital.net/idlespeculation/20100721_interview_macunovich.pdf
thanks for sharing...