China made waves with a bad manufacturing report this week, sending world equities–and particularly Japanese equities–sharply lower. But the issues in Asia go beyond just exports and currency rates. It’s about plummeting birth rates and demographics, and what it means for Chinese and Japanese investments. Jeff Reeves of InvestorPlace.com and I talk things over.
As I mentioned on the video, I would run away from Japan screaming right now, or at least I would run away screaming from Japanese equities. The short yen / long Japanese equity trade has been the most profitable macro trade in recent years, but it is a short-term trade supported with very weak fundamentals. The next fortune to be made in Japan will likely be in shorting its bonds.
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