What Europe and Japan Really Need Now Is Ben Bernanke
Like or loathe the range of stimulus policies he enacted, during his time as Chairman of the Federal Reserve one clear impact is that the U.S. economy is now in a much better place than the economies of Europe or Japan.
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Take today's disclosures. In Japan , household consumption fell for a fourth successive month since the country's national sales tax was lifted from 5% to 8% in April. Meanwhile, retail sales and industrial production data were also below forecasts, while inflation measures stalled as well.
In the eurozone , inflation measures fell to a five-year low and unemployment was stable -- at a mere 11.5%. That's not good. In the UK, supposedly the strongest European economy, the leading food retailer Tesco
That's why both economic areas need Bernanke.
Central bankers in both Europe and Japan have their heads in the sand at the moment. Eventually they will realize that any success Bernanke had was from not being scared to repeat quantitative easing and related policies experiment. Mario Draghi of the ECB cut the deposit rate to zero . In Japan, Shinzo Abe is running his "three arrows" experiment.
But those moves are just a start. Today's data indicates more action is needed -- and fast.
Even without Bernanke, both regions will probably get to a recovery eventually. But each day they prevaricate the worse it is for the rest of the world, including the U.S. indices, given business interconnections globally.
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So should investors stick with just U.S.-listed or U.S.-focused companies?
Not necessarily. Bad news in Europe and Japan means lower share price valuations -- no surprises there. But if you can buy globally focused European or Japanese companies listed on the U.S. markets in ADR form, then you get potentially the best of both worlds. And you can buy companies that are not yet consensus buys.
Sometimes in equity investing it is so bad that it's time to buy. That is Europe and Japan today.
At the time of publication, the author was long TSCDY, TM, SNE and SYT.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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