If you look at the graph on right, it’s easy to see why everyone’s worried America’s on track for its own two lost decades. Anemic bank profits are another sign we’re turning Japanese.
Western businesses are already on track to buy back stock and keep earnings high. Even in a period of economic stagnation, America’s equity market can keep rising.
Japanese and Western markets both suffered from de-rating. BUT the Nikkei suffers from continued weak earnings
The key restraint on Japanese earnings was share dilution -- which would be ameliorated by buy-backs
Here's the key chart: Japan has plowed ahead with equitisation, while Western companies de-equitize (except right after the financial crisis)
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