- Conditions in the U.S. stock market resemble the late stages of Japan's 1980s bubble, suggesting that the lessons provided by the Japanese experience may apply today in the U.S.
- From its peak in 1989, the Nikkei lost 17% in just 9 weeks, 30% in 14 weeks, and 49% in 40 weeks, wiping out three years of gains.
- Aggressive monetary and fiscal policy failed to prevent continued losses, with investors still underwater over 30 years on despite the ballooning of the central bank's balance sheet and government debt.
- A similar response by U.S. policymakers would simply undermine real GDP, although the U.S.' position as a major net debtor may mean the Fed and Treasury have less room to ease policy due to stagflation risks.
For further details see:
SPX: 3 Lessons From The Collapse Of Japan's Bubble