The conundrum of Japan is about as confusing and counterintuitive as it gets. Economy slowing down, but interest rates ramping? Stock market going lower, sinking, sinking, and Mr. Yen lectures that the U.S. market is bubbling too high? The yen getting stronger even as its finances are in greater disarray? What is wrong with this picture?

Just about everything. We are told by the sages that these things can't happen. You can't have a strong currency and a weakening economy with the government turning on the spigot. You can't have a declining stock market and interest rates skyrocketing -- before the economy comes out of recession. (The textbooks say that initially, at least for the first year out of recession, interest rates can go up and the stock market can go higher!!!) All I can say is thank heavens I am not a macro guy because there is no way you could have gotten this stuff right.

That said, I am drawn to Japan for a trade. I think that the dollar is unnaturally low and will go higher. I think that Japan's bond market is signaling that the economy is getting better. Therefore, it would seem to be the stocks that are out of whack. Mind you it is a trade; until Japan cleans up its act, you can't make a big bet there. But when I look at what is wrong over there -- valued wrong -- I think it is the stock market, and I am buying some Japan index calls (JPNs) for a shot to the upside.

James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending a letter to TheStreet.com

at

letters@thestreet.com.