Fiscal Spending

by Larry Levin

Since today's market contained no news and was very slow, I thought I would write a bit more about fiscal spending madness - Japan-style.

Congress please take note: Japan has been "fiscally stimulating" its economy for nearly 20-years with no success. It has, however, added towering amounts of debt to its people.

Recently I wrote - "Japan also tried to spend its way out of its debt deflationary spiral in the early 1990's.

"The steps that Japan took included a 10.7 trillion yen stimulus package in August 1992 - a 13.2 trillion plan in April 1993 - 6.2 trillion in September 1993 - 15.3 trillion in February 1994 - 14.2 trillion in September 1995 - 16.7 trillion in April 1998 - 23.9 trillion in November 1998 - and 18 trillion in November 1999. The grand total: a whopping 118.2 TRILLION yen, which is about $1-trillion at today's dollar-yen exchange rates. Yet it was all for naught. The economy still suffered a 'Lost Decade' of deflation and lackluster growth.

"Frankly, Japan is just one year removed from 'TWO lost decades' of deflation and lackluster growth. But wasting money isn't stopping Japanese politicians. Last August Japanese officials announced another stimulus, this time 11.7 trillion yen. And then, just a few months later, officials announced an additional 5 trillion yen stimulus in October. But what the hell, if it doesn't work it couldn't be because the Keynesian claptrap is wrong - no - it just wasn't done properly or some other idiotic excuse. Just a few weeks ago Japan announced ANOTHER stimulus of 20 trillion to 30 trillion yen."

Although none of this mad spending has resulted in a rebound for the Japanese economy, its officials keep repeating what doesn't work: so-called fiscal stimulus. Today we find out the madness will continue in the land of the rising sun.

Japan plans to unveil a fresh economic stimulus package this Friday, valued at more than 2% of the country's GDP. According to a report from Kyodo News, Finance and Economics Minister Kaoru Yosano said he expects the new stimulus plan to involve fiscal spending of over 10 trillion yen ($99 billion).

I can hear it now - "The Lost Decade - Part II" now playing in Japanese theatres and soon to cross the Pacific and play in theatres across the U.S.



Previous Day's Trading Room Results:

Trade Date: 4/6/09

E-Mini S&P Trades*
(before fees and commissions):


1) VA buy @ 8:40am at 826.00 = b/e (1 lot)

2) VA sell @ 8:40am at 826.00 = b/e (1 lot)

3) Engf sell @ 1:20pm at 824.75 = -1.25 (1 lot)

4) Engf sell @ 1:40pm at 824.00 = -1.75 (1 lot)

5) Algorithm positions (4)...combined Secret's and Algo total...-1.00


Electronic (YM) Mini-Dow:

1) None today



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