I would guess it would be quite possible for a number of countries to enter a period of low growth for years, I am not sure they will have the ‘Japan” experience though. The bubble in Japan was unique in many ways and was actually not quite as bad an many people make out. I arrived in Japan for the first time during the so called “lost decade” and the place seemed pretty vibrant to me.

As for the next bubble I am sure steps are being taken now that will create one. A commodities bubble perhaps?

And whether people will modify their investment habits based on such knowledge. An interesting example is bullion – It hasn’t gone ballistic like it did back in the 1970s and very early 1980s. Of course we haven’t had the oil supply shocks we had back then. Or the inflation – Yet anyway.

I think of the Nikkei – I don’t think it is overstating it too much to say its been in a pretty nasty twenty year bear market? But I also gather its seen its fair share of ups and downs over the period. And wonder if it may just be possible that if different countries get the feeling that their economies are in for a long low flat/unhappy time that their investors mightn’t learn something from that – Regarding their home stock exchanges anyway?

A lot of it will still come down to inflation expectations though I think. While its my understanding that high inflation isn’t great for stocks in real terms it is way better for them than it is for cash.

But my crystal ball IS well and truly shattered!

As you have probably guessed I am fairly bullish on Asia and see this region as being the engine that will spur on the next burst of global growth. It is a big region with a huge emerging middle class and I can’t see them giving up their dream of a better future just because some western consumers are having a hard time.

Let’s not mention the cricket for a while

The indications are that catastrophe has been avoided. But when one pokes around some sites that aren’t too given to end of the world scenarios it is still possible to get the impression that various bits of the world will be paying for the GFC in one way or another for anywhere up to 15 years.

Inflation seems to be the “great white hope”? Although Western governments would deny it I think. Gradually we are just going to have to see that shift away from Western consumption towards Asia – Das talks about it a bit.

With markets continuing up and down throughout the process I suppose. Hope springs eternal in the human breast hey? So Oz will line up for the next Ashes series I’m sure – Smile!

The double dip recession scenario is another worry because I do not think anyone really knows at the moment what will happen when governments start to wind back their spending. Can the U.S. economy for example stand on it’s own legs without the massive support of the taxpayer?

As for China I still don’t see how the economy will return to strong growth without demand returning for Chinese exports. There is only so long you can keep factory workers occupied with building bridges etc.

Also the timeframe for resetting of the bulk of the remaining several trillions worth of US ARMs is worth watching – That’s still a year off I guess?

Maybe America will just have to print some more money to bail itself out of a double dip recession. That bloke I follow a bit called Satyajit Das reckons the deleveraging will have to go on and seems to be inclinining to the view that the US is in for a long term flat spot with some ups and downs in it – Similar to Japan. Witty gent – He reckons their currency used to backed by gold but now it’s the 86th Airborne – Smile.

http://www.simoleonsense.com/satyajit-das-on-placebo-effects-green-shoots/

And the Chinese recently made a comment that their recovery is “unbalanced”. One thing is obvious though – Namely the bubble (and bust?) mentality remains alive and well.

I am actually pretty suspect of all P/E ratios simply because the earnings side of things can change very quickly. It is a bit like batting averages, a good batsman might average 50 but this does not mean he will not get a duck the next time he comes out to bat. However over the longer term you figure he will get back to form and start scoring runs again.

Maybe I should leave the cricket analogies alone? Oh the pain of that Ashes loss!

http://www.australian-economy.com/

I cannot really comment more because I do not follow the U.S, market in that much detail.

I wonder if they have the same figure for the S&P/ASX 200? (I could not find it)

Personally I look at historical P/E’s and forward looking P/E’s (amongst other things) to try and help me through the fog of a recession.

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_500/2,3,2,2,0,0,0,0,0,1,11,0,0,0,0,0.html

“I doubt it will be in the red again for many years, if ever.”

Haha, I will hold you to that one Greg.
An 11.7% change is hardly a position of resilience.

Senator: I admit I don’t follow every industry, so I cannot really say much, but I have found some gold miners to be doing pretty well, and even other companies doing surprisingly well (like Woolies).

But…I still think there is a certain level of BS in these reports, especially from finance related companies, and some of them may be forgoing current loss reporting now, hoping to absorb it later when things pick up. Which is dodgy of course, and also a risk if things don’t pick up and they are stuck reporting even more losses than they should have to.

It’s all legit if you don’t get caught right?