In Japan, the 1990s are referred to as "the lost decade" -- a period in which economic growth halted and the Nikkei stock index lost 63 percent of its value. The reasons for the derailment of the Japanese miracle are unsettlingly familiar:

Briefly, a combination of incredibly high land values and incredibly low interest rates led to a position in which credit was both easily available and extremely cheap. This led to massive borrowing, the proceeds of which were invested mostly in domestic and foreign stocks and securities.

Recognizing that this bubble was unsustainable (resting, as it did, on unrealizable land values-- the loans were ultimately secured on land holdings), the Finance Ministry sharply raised interest rates. This popped the bubble in spectacular fashion, leading to a massive crash in the stock market. It also led to a debt crisis; a large proportion of the huge debts that had been run up turned bad, which in turn led to a crisis in the banking sector, with many banks having to be bailed out by the government.

But what might be even more disturbing: On Monday, the Nikkei closed at a 26-year-low. The lost decade's "massive crash" now looks like just a bump on the road.