How a broke Japan could be good for stocks

Britain's not the only country mired in debt. The Japanese government is now so deep in the red that it could easily go broke. But paradoxically, that could be good for Japanese equities.

In 2003, Morgan Stanley closed its Asian Equity Fund.

When Asia was a popular investment in the mid-1990s, this fund managed over $350 million. But by 2003, the Asian stock markets had fallen in half. The public didn't care about Asia. Morgan Stanley's fund had shrunk to less than $10 million in assets. The management fees couldn't cover the costs, so Morgan Stanley made a business decision and closed the fund.

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