NEW YORK ( Minyanville) -- It has been three months since the horrific Japanese tsunami, the economy is in free fall, and radiation is still lingering in the air and water. It now appears that the beleaguered nation's GDP shrank at a 4% rate, in line with my own expectations, but far worse than anyone else's. The down leg of the "V" is well underway. When does the up leg begin, and when should we start positioning for it? One need look no further than Toyota Motor's ( TM) stunning year-on-year decline in domestic sales of -69%. Consumers in the US want to buy its fuel-efficient cars, but sought-after models are in short supply. Power shortages have been a major headache, and additional nuclear shutdowns have exacerbated the problem. A 28-week, $60 billion buying spree of Japanese stocks has ground to a halt, taking the Nikkei down 10%. The government has already passed two supplementary budgets to get reconstruction underway, one for $50 billion and a second for $125 billion. The Bank of Japan has carried out quantitative easing worth $500 billion; nearly triple the Federal Reserve's own recent QE2 efforts on a per capita basis.
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