East Meets West?

Joanie has some advice for the Japanese:

East is nevuh gonna’ meet West, that’s for darn sure.  Take this latest embarrassment for the TSE called Livedoor, eh?  You think it would ever have gotten to the point where there would have been a panic in NY, necessitating the  shut-down of the Exchange?  Not on your life.  If the regulators had busted in there and found Newsboy Moriarty  doin’ the books, fer cryin’ out loud, the story might have made Page 19 in the NY Post.  Maybe.  Because once the  brass here in NY got so much as a whiff of that debacle-in-waiting, you know they would have called a meeting of  the five families.  Behind closed doors, of course.  33 Liberty Street seems as good a venue as any.  You are  familiar with the drill:  A single stock suspended.  A couple of days of whispers.  WSJ in the dark either voluntarily or not.   And the most informative blurbs to be found in the FT.  Next thing you know, a couple of  weeks have gone by and nobody can even remember if it’s Livedoor or Trapdoor or Katie-bar-the-door or we’ve got tickets to see the Doors. 

Whatever.  It never ceases to amaze me that a culture that perfected the delicate, elegant art of Origami over a thousand years, cannot figure out how to do a basic cover-up.  Amazing.   

Refco. Huh?  Who?  What?  See what I mean?  Next case.   

What's been said:

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  1. trader75 commented on Jan 18

    There were high hopes that Japan would be engine of growth to the world number 2, ready to kick in as tired old number 1 starts sputtering.

    Looks like they’re blowing the audtion though. Just not ready for primetime. Land of the Rising Sun = Land of the Keystone Cops as far as macro goes.

    But hey, on the bright side, maybe we’ll see a fresh flood of disappointed capital into long bonds, pushing rates back down and giving the Sunshine Pumpers another reason to Hip-Hip-Hooray. That stupid old yield curve don’t need no nevermind anyhow. Zip-i-dee-doo-dah, Zip-i-dee-ay…

  2. Adam Carstens commented on Jan 18

    Just because one company is investigated does not mean the whole economy is built on sand…our research data shows Japan is actually more entreprenurial these days than the U.S. Our data and book is here: http://www.renewalcycle.com.

    This is a buying opportunity for Japanese investors. Just as 1987 was a buying opportunity for US investors.

  3. B commented on Jan 18

    Come on! Book pumping? More entreprenurial than the US? You are kidding. That is rhetorical because you couldn’t convince me with a response.

    I’ve been to the land of the rising sun often. Fuggedda bout it.

    There are many great things about their culture and business practices but show me the money. I want to see new business starts over a period of years in Japan versus the US when you talk about being entreprenurial. I also want to see how many people work for companies with less than fifty employees. Anything other than that is bunk.

  4. Adam Carstens commented on Jan 18

    Yeah, OK, B, can’t convince you. The book and the data speak for itself. If you want to wait until your criteria of the data are available, then it will already be too late to invest…

    But good luck … let’s check in on the S&P and the Nikkei in 12 months.

  5. B commented on Jan 18

    Wanna make a healthy bet on that? A PE of 40 for the 225? An economy growing 1%. An overall market PE much higher than the US. The Nikkei is moving on the premise that global inflation is back and the Japanese economy will break out of its deflationary funk….A declining population and labor shortages which are ultimately inflationary…..An administration that is finally trying to deregulate and break monopolistic practices thus creating competition…..which will spur additional growth…….(Alot of huffing and puffing so far) The blow off was caused by too much global liquidity chasing diminishing returns on a hope and a prayer Japan will change. They are like locusts going from field to field to keep their existence in tact. Just like oil, commodities and everything else that is blowing off. Liquidity looking for returns when they aren’t getting it from American equities. Ultimately the prophecy will be self fulfilling when there are no more buyers at a certain price.

    The monthly BB on the Nikkei was violated with a vengeance and the price is so far outside of its two month standard deviation monthly prices that I’ll bet you dinner this isn’t just a fuss with some rinky dink company. A 50% run without a correction? Do you follow history? That always means trouble ahead and many times points to a significant market peak.

    The only other time I’ve ever seen such an absurd blow off in equities in the last 50 years is the Dow in 2000 and the Nikkei in it’s manic depressive states.

    Now, I chastise your book but I am mostly teasing. I’m sure there are many valid points and alot of well thought out research. But, I am highly skeptical of entrepreneurial comments. Better at strategy? Maybe. Better at focusing on long term results rather than quarterly profit? Likely. Things American companies can learn from them? Surely. More entrepreneurial? Uhhh………..Don’t see too many VC funds plunking down millions in Japan for the next Google, Yahoo, Apple, Dell, Oracle, Siebel, Genentech, Amgen, etc.

  6. Adam Carstens commented on Jan 18

    All I will say in response is that its nice to see you chastise the book without having read it. Get thee to a library.

    Nikkei back up this morning (in Japan) by the way.

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