Wednesday, May 20, 2009

Japan GDP

Japan Posts its Worst GDP Number Ever

What are the odds that the worst GDP report ever is followed by a V type recovery as it seems to be currently embedded in Japanese equity values?(Or at least expectations that another L wont occur)
Here's some analyst comments from the worst report ever
We’ve turned the corner. The economy is no longer in free fall"
“The worst is over,” said Hiromichi Shirakawa, chief economist at Credit Suisse Group AG in Tokyo. “We’re going to see positive growth -- not significant growth, but growth --from the second quarter onward.”

They usually justify the optimism by hand picking data that is bouncing around
It just seems that the odds that people are engaging in wishful thinking is much greater than the odds of a actual V recovery after collapses of this magnitude(specially when needed reforms are still lacking), maybe wishful thinking is as much as 8-1 favorite to be taking place than the theory that an actual V type recovery is happening

I've been hearing a lot of 'inventory' recovery in the 2nd half following inventory drawdowns in the US and countries. That is totally wrong, inventories are down but SALES are down even more

As sales reset to a new level so does inventories, who is going to rebuild invetories when you can't sell anything?

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