There was a photo in the news the other day of truck trailers stacked on racks ten high filling an entire city block in Japan. The point of the accompanying article was that Japan is so heavily dependent upon selling consumer goods that the recession has hurt them more than any other industrialized society. We assume that the recession will gradually mend itself and that is likely to be true. The question is which nations will have problems with the stimulus debt they have incurred and which internationally well know companies will go under.

In the United States post college kids are coming home to live with their folks. The conversation among the twenty and thirty somethings is beginning to sound like their grandparents who survived the great depression. Those who made it through the thirties have carried a more frugal approach with them their whole lives. The point of this for the active trader is that the rate of spending on consumer items may not come back to its pre-recession level for a long, long time. And, there is an awful lot of industrial capacity throughout the world.

The question, as always, is whose stock will go up and whose stock will go down, and how fast? Japan has led the world in consumer electronics but if the post recession society gets more frugal, Japan stocks may suffer as people carry their cell phones, blackberries, mp3 players longer and look for durable products instead of changing for fashion’s sake. What will happen to Japanese stocks such as Sony’s and Samsung’s and how soon? There are doomsday scenarios wherein the collapse of Japanese stocks precedes the collapse of the Japanese economy leading to a picture of grass growing where bullet trains used to run.

Whatever happens to Japan and Japanese stocks, watching how industrial economies shake out after the recession is officially over may be profitable.

German industry has the deserved reputation for making complex, well engineered machines. A company in China uses machinery made by German industry, Japanese management principles, and cheap Chinese labor to make stretch film to wrap products heading all over the world. What happens to the German industry when fewer products are shipped? Less shipping means less stretch film means less work at the factory means less demand for new complex, well engineered machinery made by German industry.

Germany has its own coal deposits in the Ruhr Basin and has a healthier agricultural sector than Japan. German industry also only needs to send much of their product across a couple of national borders in the European Union as opposed to Japan which needs to ship everything overseas.

Nevertheless, German industry may also take a hit after the recession is officially over. Certainly in the car market German industry may see a dip in sales if the new cultural bend goes toward keeping cars longer. BMW’s and Mercedes are well made cars and if you are not shopping for a new one then German industry will need to wait a long time to sell you another car.

Everyone seems to assume that all Chinese companies will do well forever but Chinese society is aging with the “one couple one child” rule so that there may come the point when cheap labor is not a given for Chinese companies. China has its own problems with ethnic minorities and a chronic problem with water in the Western provinces. Betting on Chinese companies may not be the brightest thing in the long term.

However, you are a trader. Keep track of who is going up and who is going down and make your profit on the movement as the post recession world sorts itself out.

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