Bill Luby submits:

I am generally not a fan of so-called air quotes, nor am I a fan of the gratuitous use of quotation marks for added emphasis in print. That being said, I have this tendency to invent new concepts and attach labels to them that I pull out of the sky. When I do so, as is the case with event theta, the quotation marks are merely shorthand for warning readers that I am making stuff up and cloaking it in somewhat fancy-sounding attire. In other words, if you Google “event theta” you will find a lot of information about sorority functions and the like, but nothing (as far as I can tell) about options concepts.

So what is event theta and why do I think it is important enough to invent a label for it?

Nineteen days ago, Japan was hit by a 9.0 magnitude earthquake and a subsequent tsunami

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Lou Basenese submits:

Japanese stocks currently rest at historically cheap valuations. On the flip side, however, the Japanese yen is sitting near historic highs. It’s a situation that poses a serious threat to your profitability – as I warned last week.

Cheap stocks set against a strong yen simply don’t mix. Why? Simply put, because Japan is such an export-driven economy. So if the yen appreciates, it makes the country’s products less affordable to foreigners, thereby reducing sales and reducing economic output. By contrast, when the yen depreciates it boosts exports, as Japan’s products become more affordable to foreigners.

A current WisdomTree Research report underscores this reality, too. Over the last three years, Japan represents the only developed country that exhibits a rare negative correlation with its currency. When the yen drops, Japanese stocks rise — and vice-versa.

[Click to enlarge]

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Tom Lydon submits:

Japan’s stock market and related ETFs have fallen since disaster struck the country. With continued uncertainty in the country regarding the impact of the nuclear reactors, and prices as low as they are now, some are wondering if Japan, the world’s third-largest economy, is a buying opportunity.

The Tokyo Stock Exchange dropped around 20% in the days following the earthquake and tsunami, and has come back since then; it’s down 7% since the quake. The government of Japan declared the event a “large-scale” disaster, which means the nation bears nearly 90% of the cost of restoration work such as of the roads and ports, reports The Yomiuri Shimbun. But the issue with the nuclear reactors could delay a big part of the reconstruction that needs to take place.

There is still uncertainty around the nuclear reactors, and that has had a negative effect on the economy and stocks, reports Anna

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Tom Lydon submits:

Japan’s stock market and related ETFs have fallen since disaster struck the country. With continued uncertainty in the country regarding the impact of the nuclear reactors, and prices as low as they are now, some are wondering if Japan, the world’s third-largest economy, is a buying opportunity.

The Tokyo Stock Exchange dropped around 20% in the days following the earthquake and tsunami, and has come back since then; it’s down 7% since the quake. The government of Japan declared the event a “large-scale” disaster, which means the nation bears nearly 90% of the cost of restoration work such as of the roads and ports, reports The Yomiuri Shimbun. But the issue with the nuclear reactors could delay a big part of the reconstruction that needs to take place.

There is still uncertainty around the nuclear reactors, and that has had a negative effect on the economy and stocks, reports Anna

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While the Japan quake and tsunami double-whammy was tragic, the nuclear disaster has been unequivocally the result of resilient, relentless incompetence and denial on the part of bureaucrats, both government and corporate. There’re plenty of nuclear experts criticizing all aspects of it, from design, manufacturing, maintenance, inspection, to all phases of containment effort after the first incident. I’m no expert and not qualified to add anything of substance in the technical aspect. But in terms of the sociopolitical aspect of disaster management, the handling by the government and TEPCO has been so poor it defies comprehension.

Three weeks after the initial incident, we still don’t know when or how it would end. The only sure things are that

• It’s bad, much worse than the government or TEPCO have ever admitted to so far.
• It’s getting worse.
• The official info has always been late and deliberately incomplete.
• The official warnings/actions so

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Ron Rowland submits:

On March 23, Invesco PowerShares and Deutsche Bank (DB) announced the first family of single-country sovereign debt ETNs: Six new ETNs that offer long exposure to German, Italian, and Japanese bonds. Each country has a unleveraged ETN as well as a 3x leveraged version.

ETNs are senior unsecured debt obligations and are subject to the credit risk of Deutsche Bank AG, the issuer. Performance is linked to the month-over-month returns (“monthly reset”) of the underlying futures indexes, minus fees and expenses.

PowerShares DB German Bund Futures ETN (BUNL) and PowerShares DB 3x German Bund Futures ETN (BUNT) provide investors with unleveraged or 3x leveraged exposure to the U.S. dollar value of the returns of a German bond futures index.

The underlying index attempts to measure the performance of a long position in Euro-Bund Futures of Federal Republic of Germany-government issued debt securities (”Bunds”) with a remaining term of not less

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Clemens Scholl submits:

It is nowadays popular to invest in foreign markets, including
Japan
, by using exchange traded funds. These funds however only represent an index with a very wide variety of companies, of which some might be excellent, but others not at all. ETFs that mirror Japanese markets are, for example, EWJ (representing the iShares MSCI Japan index), SCJ (iShares MSCI Japan small-cap), DXJ (
Japan
total Dividend) or DFJ (
Japan
small-cap dividend). While these ETFs might have their merits for diversification, it is per definition impossible to outperform the market using them (since they mirror the market, you don’t underperform either – excluding the fees, of course).

Today I want to go stock-picking in a specialized sector in
Japan
: the natural gas utilities. The tragedy of the Tohoku earthquake has put a focus on
Japan
’s need for natural gas. More LNG imports are needed in the short term in
Japan
to supply

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Clemens Scholl submits:

It is nowadays popular to invest in foreign markets, including
Japan
, by using exchange traded funds. These funds however only represent an index with a very wide variety of companies, of which some might be excellent, but others not at all. ETFs that mirror Japanese markets are, for example, EWJ (representing the iShares MSCI Japan index), SCJ (iShares MSCI Japan small-cap), DXJ (
Japan
total Dividend) or DFJ (
Japan
small-cap dividend). While these ETFs might have their merits for diversification, it is per definition impossible to outperform the market using them (since they mirror the market, you don’t underperform either – excluding the fees, of course).

Today I want to go stock-picking in a specialized sector in
Japan
: the natural gas utilities. The tragedy of the Tohoku earthquake has put a focus on
Japan
’s need for natural gas. More LNG imports are needed in the short term in
Japan
to supply

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Gad Allon submits:

By Martin Lariviere

Given that the earthquake and tsunami and subsequent nuclear issues disrupting global supply chains happened in Japan, someone would inevitably tie supply difficulties to Japanese management practices like just-in-time production. Now, I would agree with readers who would argue that it is wrong to characterize lean operations etc. as Japanese when such approach have become standard business practices around the world. That said, Reuters stepped into the breach with an article linking the quake to just-in-time production (Special Report: Disasters show flaws in just-in-time production Mar 21).

In a globalized economy where manufacturers have moved ever more toward lean inventories and “just-in-time” production — keeping ultra-low quantities of parts on hand to avoid holding expensive stocks of parts — a speedy response was vital because a disruption to the global supply chain would spread quickly, shuttering plants employing legions of workers around the world.

Arguably, what the

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In the two short weeks since the March 11 Tohoku disaster, being bullish on Japan has almost become a cliché. The sheer scale and speed with which foreign investors piled into Japanese stocks in the wake of the March 11 earthquake and tsunami and after a two-day rout on March 14 and 15 is one for the record books.

In the U.S., Japan-related ETFs experienced $1.2 billion in inflows in the week after the March 11 disaster. On March 16 alone, Japan equity ETFs traded in the U.S. reportedly saw an estimated $700 million in inflows, the heaviest one-day inflow on record. According to Japan’s Ministry of Finance, foreign investors bought a record JPY 891 billion (USD 11 billion) in Japanese stocks in the week through March 18, the most since comparable records began in 2005. The Tokyo Stock Exchange numbers indicate cumulative net buying of JPY4,362 billion (USD54 billion)

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