Unless Japan moves to reduce its fiscal deficit sharply -- in the fat years of this business cycle -- its public sector debt-to-GDP ratio will rise without limit.

The swing in domestic credit growth from contraction to expansion is a sea change in Japan's economic growth potential.

By all accounts, this rally is being driven almost entirely by massive inflows of foreign investors. This has the hallmark of a bubble, with tons of investors piling onto the bandwagon.

If the euro does tumble again -- and we think it will -- we must expect the ECB to orchestrate another round of currency intervention.

We think the market was too fast to move stock prices up in anticipation of an economic recovery. The Nikkei is set to slide.

We think the market was too fast to move stock prices up in anticipation of an economic recovery, ... The Nikkei is set to slide.