This Won't End Well

With both the Real Estate and Banking equity indices in Japan already in bear markets (down over 20% from recent highs) and the broad indices down over 15%, just how much pain can the massive influx of foreign capital take before the exodus really takes hold. Today's 'news' of the GPIF's allocation shift won't be enough to stem the tide as 'foreigners' (who have flooded on an epic scale into Japanese stocks) step away to the next hot-money focus... this won't end well.


The Real Estate and Banking indices were the best-performing, most hot-money riddled indices and evidence that things are shifting rapidly in Japan...


and with this kind of massive flood of foreign capital into Japanese stocks, we suspect things will not get any better when this chart 'normalizes'...



Charts: Bloomberg and Barclays


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