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How to Play the Japanese Stock Market Euphoria

By , Associate Editor, Money Morning • @JimBach22 -

Japanese stock market

U.S. market indexes plunged yesterday (Wednesday) and took the Japanese stock market with them.

The Nikkei 225, a Japanese stock market index tracking 225 Japanese blue-chips, fell 1.4% today. This was the day after a broad sell-off in the U.S. stock market. This was a blip in what will be a larger rally.

Japan is presenting an opportunity, but this recent sell-off shows that investors need to be discriminant in buying Japanese stock...

Stock Market Today Reacting to Japan Recession News

By , Behavioral Trading Specialist, Money Morning -

Stock market today

Good morning! Futures forecast a slight decline in the stock market today from yesterday's close despite positive momentum for European and Japanese stocks.

What to watch today: expect the markets to react to an important set of earnings reports and increased focus on the Japanese economy. After Japan reported it has entered a recession, its Prime Minister Shinzo Abe announced the nation will delay a national sales tax increase from 2015 to 2017.

Here's the other stock market news to watch - including your "Money Morning Tip of the Day" - to make it a profitable Tuesday:

Japanese Recession: How to Play the Dismal Growth Reports

By , Associate Editor, Money Morning • @JimBach22 -

Japanese recession

The news of the Japanese recession has taken economists by surprise, but the problems with the Japanese economy have been so entrenched that no negative news should come as a shock.

You see, Japan has been battling with deflation for most of the last two decades, and that's only helped to reinforce this current bout with recession.

Here's how to play the Japanese recession for gains.

DON'T BE SO ARROGANT, MR. PRESIDENT

By , Chief Investment Strategist, Money Map Report -

Empires have come and gone. Some lasted a blink of an eye and some millennia.
The question is, after 9/11, the rise of China and a great financial crisis, where does the U.S. empire stack up to its predecessors?
Well, it seems the one commonality they all have is the point when their might was undermined by sloth and greed. And entitlements: free bread and circuses. For some it took years, others centuries.
Here, in a compelling and unique address, is what Romulus Augustus, the last emperor of the Roman Empire, might say to President Obama now about how to keep America great.
Read on and share with family and friends...

The Latest Obama Outrage: the Family's $100 Million Vacation

By , Money Morning -

How much do you spend on your summer vacation? American households usually spend about $1,200 per person on summer vacations, according to a recent American Express survey.

Presidents spend more on their vacations than you or I. They have to. Air Force One and security does cost more than loading the Honda and heading to the beach.

Here's how much some recent presidents spent our tax dollars on vacation.

Ronald Reagan spent most of his free time at his California ranch. Taxpayers covered the cost of approximately $8 million for presidential travel during Reagan's first six years in office, according to the Los Angeles Times. That amounts to $1.3 million a year.

For George Bush the cost of flying Air Force One to his Texas ranch was approximately $56,800 per trip, for each of the 180 trips according to Media Matters. President Bush spent Christmas during his two terms at the White House so his staff and secret service could spend the holiday with their family, according to Conservative Byte.

Now Obama plans to blow away all previous presidents' leisure travel costs on our dime with a better than Disney World extravaganza trip to Africa.

However Obama had to cancel the safari because of the need to fill the surrounding jungle with snipers to guard the president from wild animals!

To continue reading, please click here...

Bank of Japan Called "Single Biggest Danger to Global Markets Today"

By , Money Morning -

The Bank of Japan is sticking to its policy of fiscal stimulus to try to stoke inflation, and that's rattled markets worldwide.

There are short-term signs of economic recovery such as an increase in consumer spending and in manufacturing.

But longer-term, Money Morning Chief Investment Strategist Keith Fitz-Gerald told CCTV, "there has never been an instance in history where stimulus has worked. So the question really is when, not if, this will break down."

Check out the accompanying video to learn why Keith considers the Bank of Japan "the single biggest danger to global markets today."

How to Profit From Japan's New Lost Decade

By , Chief Investment Strategist, Money Map Report -

An old Japanese proverb notes "ura niwa ura ga aru" which means the reverse side has a reverse side.
Japanese markets have come a long way in the past 8 months rising an additional 4.94% in wild trading on Monday alone. Yet there are real long-term dangers to all this volatility.
First and foremost, when (not if) Japan collapses it will affect every investor, in every major market, regardless of your exposure to Japan.
Click here to find out what you can do to profit from the maelstrom...

Are Japanese Stocks a "Buy" with the Nikkei on the Rise?

By , Money Morning -

Anyone invested in Japanese stocks took notice when the country's minister of state for economic and fiscal policy, Akira Amari, said at a Yokohama meeting that he hopes the government takes steps to push shares of the Nikkei 225 up about 17% to 13,000.

"I would like the government to take successive steps to push share prices higher,"Amari said Saturday. "Higher share prices work to improve corporate earnings. It is important for the government to show that it will work hard to aim at having the [Nikkei 225] index hit 13,000 by the end of the fiscal year in March."

Amari also noted the Nikkei was up more than 2,000 points since former Prime Minister Yoshihiko Noda announced the dissolution of the Diet in November. In fact, the Nikkei 225 Stock Averagelast week closed at its highest since September 2008 after a 12-week advance that was the longest such streak since 1959, according to Nikkei Inc.

Articles in the English-language press misidentified Amari as minister of finance - a position held by former Prime Minister Taro Aso - making the comments seem more like official government policy.

Of course, no one in the government of Prime Minister Shinzo Abe will be upset if Amari turns out to be correct. Higher share prices are good for the economy and for achieving the government's aim of ending the deflationary spiral in Japan - and good for anyone who owns Japanese stocks.

To continue reading, please click here...

Bank of Japan Policy is Doomed to Failure

By , Money Morning -

The Bank of Japan (BOJ), Japan's central bank, bowed to government pressure this week by adopting a 2% inflation target and accepting responsibility for achieving that goal "as early as possible."

The BOJ announced today (Tuesday) that it will begin a program of "unlimited easing" beginning in January 2014 following the end of the central bank's current asset-purchasing program in December.

In a statement announcing the results of Tuesday's Monetary Policy Committee meeting, the Bank of Japan said it anticipates purchasing 10 trillion yen in Treasury notes and 3 trillion yen in Japanese government bonds (JGBs) each month beginning in January 2014.

The statement also indicated the central bank's balance sheet will expand by about 10 trillion yen by the end of 2014 as a result of the purchases. No further expansion of the BOJ balance sheet is anticipated thereafter.

To continue reading, please click here...

Can the Japanese Economy End Deflation With These Steps?

By , Money Morning -

Japan's newly elected Prime Minister Shinzo Abe is taking aggressive measures in an attempt to end the deflationary spiral that has plagued the Japanese economy for more than twenty years.

The return of Abe's Liberal Democratic Party (LDP) to power in a landslide election victory last month is seen as a mandate to do whatever it takes to revive the flagging Japanese economy.

One of the first policies likely to be put into place is the passage of a massive supplementary budget for fiscal 2012 (the year ending March 31, 2013). Depending upon how you count it, the budget ranges from 10 trillion yen ($112 billion) to 20 trillion yen ($224 billion).

Observers have expressed concern over the size of the stimulus and what impact it might have on Japan's sovereign credit rating and on the Japanese government bond (JGB) market, plus what it could do to the U.S. economy.

Let's take a look.

Arm Twisting the Bank of Japan

The supplementary budget is nothing but good, old-fashioned pork barrel spending; the kind of money politics the LDP was known for when they governed Japan for more than 50 years.

What is new and different about Prime Minister Abe's approach to reviving the Japanese economy is his strong arm tactics against the Bank of Japan (BoJ), Japan's central bank.

BoJ independence was enshrined in law only in 1999. Abe has run roughshod over the intent of the law by demanding that retiring BoJ Governor Masaaki Shirakawa sign a written document agreeing to do whatever is necessary-generally considered to be "unlimited easing"-to achieve an inflation target of 2% over the medium-term.

At its last Monetary Policy Committee (the equivalent of the Federal Reserve's Open Market Committee) meeting, which took place just after Abe's landslide election victory, the BoJ agreed to review its policy goals and come back in January with updated policy recommendations. The next Monetary Policy Committee meeting takes place over two days on Jan. 21 and 22.

Press reports indicate that the BoJ will roll over and do pretty much whatever Abe wants - and here's why.

To continue reading, please click here...

Why The Fiscal Cliff "Deal" is Spelled P-O-R-K

By , Chief Investment Strategist, Money Map Report -

Behind the scenes of the Fiscal Cliff debate, there was plenty of f-bombing, poison pilling, and grandstanding leading up to the deal - and that was before the members of Congress and the Senate actually got serious with their usual ultimatums, followed by earnest- looking sound bites and posturing. But what gets me really riled up is the amount of "pork" contained in the bill...

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