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Mix-Ansicht- U.S. stock slide is looking like Japan's! (USA-Today) - marsch, 21.08.2001, 21:24
U.S. stock slide is looking like Japan's! (USA-Today)
[i]Sind das die ersten Flocken der Wahrnehmungslawine der breiteren Masse? Oder wie d. mal schrieb: Die ersten rufen Feuer...?[i]
U.S. stock slide is looking like Japan's
By Matt Krantz, USA TODAY
U.S. investors are starting to get a taste of what a no-growth, Japanese-style
stock market slide feels like.
After 2 more weeks of losses, the Nasdaq composite and Standard & Poor's
500 are at levels first hit in 1998. If stocks don't rebound until 2002, as many
believe, investors face a fourth year of dead money.
Some are even starting to compare U.S. markets to Japan's 11-year stock
slide."The Nasdaq is doing what the Nikkei did," says Mark Headley,
portfolio manager of the Matthews Japan fund. U.S. investors have gotten
used to stocks bouncing back,"but that's not what always happens," he says.
Japan's plight is worse. Firms there are avoiding painful measures, such as
massive layoffs, says Gary Motyl of Templeton Institutional Equities. And
banks still are reeling from bad loans made during the '80s.
Even so, Japan shows how ugly post-bubble markets can get. The Nikkei
index has sunk to levels last seen in December 1984, when U.S. indexes were
nearly 90% lower.
Some similarities to Japan:
• Ferocious interest rate cuts have had no effect. Japan has cut rates to zero,
but its economy and stock market are still lifeless. Although the Federal
Reserve is expected to slash rates for the 7th time this week, U.S. stocks are
still collapsing. The Nasdaq is 63% below its 2000 high (the Nikkei is 71%
below its 1989 high). All three major U.S indexes are down since the Fed
first cut rates Jan. 3. There have been seven cases when rates were cut six
consecutive times. Only once — at the start of the Depression in 1930 —
have stocks been lower 6 to 12 months later, says James Stack, president of
InvesTech Research.
• Lower rates should encourage borrowing and spending, but banks are
tightening lending, afraid borrowers could have trouble repaying, says James
Paulsen at Wells Capital Management.
• A painful unraveling is a result of firms expanding using inflated stock. In
Japan, they used shares to get bank loans. Here, companies used rising stock
to grow, says David Herro of Oakmark International fund.
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