This year’s tumble in U.S. stocks mirrors the Japanese selloff that began 11 years ago, an indication to hedge fund TTN AG that American equities may have further to fall.
The CHART OF THE DAY shows the pattern of gains and losses in the MSCI USA Index has followed the dollar-denominated MSCI Japan Index with an 11-year lag since 1990.
[...] “We may see a Japan 2.0 scenario”[...]I've been saying for many years that you do not need a crystal ball to figure out what will happen during the next 15 years: you need a history book of the great depression titled America's Great Depression by Murray Rothbard and a history book of the Japanese bubble economy's collapse from the peak of 1989-1990.
The Japan Syndrome is our Future, our destiny. They lead the western civilization by 11 years, that's it.
Oh, I hear all the voices yet again saying that "the US is not Japan", "the US consumers are not savers like the Japanese ones, they are addicted to their credit cards", etc.
This argument is just so easy to debunk: well, do you really think that those Japanese consumers were really savers when they blew the biggest real estate bubble mankind had ever known back in the 1980s? Really? The secular shift from debt addiction to debt phobia has already taken place in Japan, a long time ago, so long that the short sighted market participants have long forgotten that. And the same will happen in the US and Europe.
One final point: according to this chart, we are on the verge of one massive leg down that should take the S&P 500 to below 600 points.