Apparently revenge is a dish best eaten cold. This is not true if you are an investor, the best way to eat a bear in charcoal grilled with a cold Asahi beer.
But eating bear might soon be off the menu as Northern Japanese bear is spiced with radioactive Caesium, so certain Nihon Grizzlies just like the Nikkei still has the ability to bite back.
But none the less bears from safer parts of Japan can still be had. According to Jared Diamonds Guns, Germs and Steel, Bear alongside Hippopotamus are the fastest fattening creatures on the planet. They would be perfect domestic food animals if it wasn’t for the fact they can’t be trained to resist trampling you to death or ripping your face off.
I don’t know about hippo but bear is one of the tastiest meats I’ve ever eaten, a touch filet mignon, smoked duck cum Bresola with a wonderful fat layer like best Ukrainian Salo.
Ursine meat is probably so delicious because Bear is a wild creature living off the finest of the land. An animal is as tasty as the diversity of the food it eats, which is why so much farmed meat tastes like corn or worse.
In population dense Japan, Bear is culled so that the human population, who walk around with bells on their ankles to avoid startling bears into attack, do not get overrun. If Bear was reared like cow in modern factory conditions its taste would probably be a mockery, like the chicken of today with its 4 weeks life span.
Meanwhile back on the stock market the bear is definitely slain but it is not the time to take off our investment ankle bells yet.
I’ve been talking about an economic renaissance in Japan for many months since below 10,000 and before Abe-san even became Japanese Prime Minister. I believe this market is heading for 16000 or there about or there about as the first plateau of a long term multi year bull.
As I write the Nikkei is 15000 and I have just closed my leveraged longs because the end of such a run can be so volatile you may as well take 5000 points in profit and leave the other 1000 to the birds.
It doesn’t take a genius to see 16000 as a first stop for the market. The chart underlines why it is good to be cautious too.
What next then?
Are there bears in the woods and what are they doing?
There is a market dump that could hurt Japan and the Nikkei is the JGB, the government bond.
Something looks likely to halt the vertical progress of the market, at least for a time and the JGB could well be the brake.
Suddenly JGB bond yields have rocketed, at least be Japanese standards. At the initial stages of the new Japanese QE, interest rates vanished but they have come back and now are fast approaching 1%.
This is scary on several levels. The government has such titanic debts it can’t afford to pay high interest rates to service its debt, at least not in the long run. That’s not an acute problem to force a correction, but what could be is that banks have a good deal of their assets in government debt and higher interest rates would smack down the value of these bonds and hence dent the banks’ capital asset.
There would be bears everywhere if interest rates hit 3-4% and Japan bank’s capital adequacy were eviscerated.
This is of course a global QE unwinding issue, but that’s another article.
So what will likely happen?
The answer is of course more QE where the BOJ will buy back bonds forcing the yield down and of course cancelling a fair proportion of the Japanese national debt. Inflation up, GDP up, debt to GDP down.
This is the set up for a mighty bull.
So once 16000 conniptions are out of the way, and interest rates are kept in check through more QE, its risk on again. The sky is the limit on many good and not so good ways.
So Bull is off the menu and in the market to stay.
Kobe beef is going to get very expensive before the end of this new era.