Nikkei marks lowest close in at least 24 years

Japanese shares gave up early gains to end lower Monday, with the benchmark Nikkei 225 Average marking its lowest closing level in at least 24 years as investors sold down financials and pharmaceutical shares amid a weak economic outlook.

The Nikkei ended 1.2% lower at 7,086.03, the lowest finish in a data series dating back to 1985, according to FactSet. At its latest close, the Nikkei is less than a fifth of its all-time high of 38,915.87, which it touched nearly two decades ago. The broader Topix index slipped 1.5% to 710.53.

MarketWatch.

Like I said, all that froth about the US markets hitting a 12-year low was just filling space.

Look at what the bankers are saying: we are going through a process of de-leveraging. If companies were de-leveraging profits that wouldn't be so bad, but they are winding down losses - leveraged losses - which means many more companies are still hiding the fact that they are bankrupt.

How Low Can It Go? Comparison of the Dow Jones to Japan's Nikkei Index

A comparison of the Dow Jones Industrial Average today to Japan's Nikkei Index leading up to and after its peak in 1989. There are a lot of similarities and some differences. What do they mean?

How Low Can It Go?

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Interesting article and good to see some analysis. I have often warned against taking any notice of the finance media's love of pumping up stocks. The nightmare scenario for the major indices is that they follow the path of the Nikkei - down some 80% from its peak.

The article overlaps the Dow and Nikkei taking the zero point at the peak of both markets. The Dow bubble was partially pricked by the dotcom crash, so that its rally was less spiked than the Nikkei. However, we are approaching a critical period where either the Dow (and other US markets) continues to slide as the Nikkei has been doing or the analysis starts to break down and we see a concerted effort globally to get the economy growing again.

I know, these seem like obvious either/or options but it is wise to see how far history can be a guide. It is particularly useful as an antidote to the gushing press who see the slightest rise as a cue to con people into buying more stocks. Things can get worse!