Flying Pink Unicorns

The fall of the Japanese markets

The Nikkei 225 Index, Japan's defining stock market index, very much analogous to the Dow Jones Industrial Average that you see every day in the news, closed today at 8,747, up a tiny fraction. By coincidence, the Nikkei is extremely close in raw numbers to the Dow Jones, which closed on Friday at 8,515.

Why on earth am I telling you this? Because on December 29, 1989, the Nikkei closed at its all time closing high of high of 38,916!! Thus 19 years after the Japanese market hit its all time high, it is down 77.5% from its high!

http://en.wikipedia.org/wiki/Nikkei_225

http://finance.yahoo.com/echarts?s=%5En225

Its incredible how far the Japanese market has fallen from its peak. It fell throughout much of the 1990s, and has been cut in half again in this decade.

I was 19 in 1989, when the Nikkei closed at its high, and I well remember all the talk about how the Japanese model was superior, how the Japanese would own America (Japanese individuals and companies went on a hugely publicized shopping spree in the US, buying movie studios, theme parks, buildings and businesses. Most of these were sold in the 1990s at absolutely titanic losses).

This history of Japan bears remembering whenever anyone wants to assume anything about our future.