The stock market is up 51% from its March 9 lows. The leading economic indicators have turned sharply positive, showing gains for each of the last four months. Manufacturing is on the rebound. And banks are promising to pay record bonuses, as their earnings have rebounded.

When it comes to Japan, political change should translate into long-term profits for global investors.

The investment outlook for Japan is pretty grim right now. The world’s No. 2 economy saw its gross domestic product (GDP) decline by 4% in the first quarter – the equivalent of 15.2% annualized decline, and the worst showing in more than 50 years.

From the tidal wave of e-mails and comments I have received from numerous different sources I am under the impression that most investors view the recent rally in the world’s stock markets as a bear market rally. I suppose we would need to define a bear market rally as a rally that fails to make a new all-time high (for the S&P 500, above the 1576 reached in October 2007) and is also followed by a new low for this cycle (below 666 for the S&P 500 reached in early March 2009).

Japan - the world’s third-largest economy – is on the brink of its first recession in six years.

According to a report in The Daily Telegraph today, Japan’s gross domestic product contracted at an annual rate of 2.4% in quarter that ended June 30, after expanding 3.2% in the first quarter.

The news sent Japan’s Nikkei 225 down the most in a month.

Taipan Publishing Group’s Adam Lass says it’s a good time to short iShares’ Japanese ETF, EWJ…

The U.S. Personal Consumption Expenditures deflator, believed to be the primary gauge of inflation for U.S. Federal Reserve Chairman Ben S. Bernanke, rose 0.8% in June.

At the launch party for the Spectator’s business magazine, a banker introduced himself to me. He’d been wanting to meet me for ages, he said.

Traders have a saying. “It’s not the news — it’s the reaction to the news.” The idea is to pay attention to what’s happening behind the scenes. If the news is good and the market goes down, that points to hidden weakness. But if the news is bad and the market goes up, that points to hidden strength.