Any thoughts on Bill Bonner's buy Japan call??

He said that? I don't follow the guy that closely but I'd point out that unless you're Japanese that's a currency trade on top of a market call. You'd have to be right on both counts to get any serious traction.

Personally, I think all this talk of stocks misses the point, which is the unsustainable debt levels that nearly every major nation is running, combined with personal debt levels that are likewise off the scale. Under these conditions I'd be watching bond spreads a lot more closely than stock indices.

Perhaps Japan does a better job of hiding its losses (for the last how many years?), and for sure they have a larger source of domestic savings to draw on, but apart from that, what's their big advantage? Is their trade with the USA improving, and if not, have they found any new customers to offset that?

Don't be misled by a rising Yen. That's not a sustainable capital flow so much as the unwinding of the Yen carry trade. The flipside of that is now we have a dollar carry trade, but I suspect most of that's going into foreign bonds not stocks, now that rates are rising here and there.

My personal feeling is that for the next few years you're going to see water sloshing about the international deck, or as Bill Fleckenstein puts it, moving jello around on the plate. In short, no great investment opportunities (outside of energy and materials) - just a lot of shuffing to and fro to capture small differences.

If there's a broad theme for the next few years I'd say it's consolidation. Larger companies with access to credit are going to take out smaller companies that don't. Under these circumstances, bottom fishing for takeover candidates seems like a plan. Other than that, I don't see anything sustainable in terms of economic recovery.

Take a chart of Japan's "lost decade" and superimpose the S&P500. That tells a story. I think we're in for much the same thing - tradable rallies, but nothing that catches on for the long term. Frankly, the demographics (boomers retiring) are against us. Emerging markets may do better, but which ones? They all have a bias towards exports and in the absence of US consumers, who's their next customer? China?

Sorry to sound so bleak, but this IS a bear market.

ebear