Bubble trouble revisits nation

Japan is booming, going places, an oasis from the global crisis. One might be excused for believing that's true with a cursory look at the stock market. The Nikkei 225 Stock Average jumped 30 percent in the last three months alone. That might be fine if not for a deepening recession and the steady return of the deflation Japan thought it had finally defeated.

Bubble, anyone? Well, yes. Analysts predicting a big earnings rebound in late 2009 or in 2010 are ignoring an underlying economy that is contracting at a record pace. Things in Asia's biggest economy will worsen before the "green shoots" supposedly sprouting around the globe take root there.

Some positive signs are engendering a false sense of optimism. Japan's industrial output surged 5.2 percent in April, the most in 56 years.