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Pitarou
Joined: 16 Nov 2009
Posts: 1116
Location: Narita, Japan
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 Posted: Mon May 19, 2014 1:52 pm Post subject: |
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| rxk22 wrote: |
| Japan's pension fund is 1.26 or so TRILLION $. Looks like they are, wisely going to start buying foreign securities and bonds. As Japanese bonds and their .6% yields won't even keep up with inflation. |
And there's the rub.
Who, in their right mind, would lend money to the Japanese government at 0.6% when they have promised to print enough yen to raise inflation to 2%? The Bank of Japan, that's who. What else are they going to do with all those freshly printed yen?
The period where the government deficit is entirely financed by printing yet is already here. All the major institutions are quietly getting out of JGBs. This won't stop until:
* the government's debt has been inflated away to manageable levels (ouch!)
* the government makes a credible commitment to a balanced budget (more ouch!) |
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rxk22
Joined: 19 May 2010
Posts: 1629
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| Posted: Mon May 19, 2014 1:59 pm Post subject: |
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[quote="Pitarou"]
| rxk22 wrote: |
And there's the rub.
Who, in their right mind, would lend money to the Japanese government at 0.6% when they have promised to print enough yen to raise inflation to 2%? The Bank of Japan, that's who. What else are they going to do with all those freshly printed yen?
The period where the government deficit is entirely financed by printing yet is already here. All the major institutions are quietly getting out of JGBs. This won't stop until:
* the government's debt has been inflated away to manageable levels (ouch!)
* the government makes a credible commitment to a balanced budget (more ouch!) |
Well there was an article stating that only the BOJ was buying bonds. I can't seem to find it right now.
Anyhow http://www.bloomberg.com/markets/rates-bonds/government-bonds/japan/ the 10 year has fallen below .6%
Thing is Abe has the right idea, if they did it 10 years ago, I think it would have worked. They just pointless contruction-ed themselves into this corner.
I see 5%+ inflation mixed with some serious budget cuts. No other way to handle this without hyperinflation/sending all the old people adrift on an ice flow.
Edit http://www.reuters.com/article/2014/04/15/markets-japan-jgb-liquidity-idUSL3N0N72SQ20140415 here it is, no activity for 1 1/2 days. That is nuts for a major nation's bond |
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Pitarou
Joined: 16 Nov 2009
Posts: 1116
Location: Narita, Japan
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| Posted: Mon May 19, 2014 2:15 pm Post subject: |
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Absolutely spot on. There were other warning signs, if you kept your ear close to the ground, but that 36 hours of zero liquidity in 10 year JGBs is as clear s signal as you're going to get short of the finance minister publicly disembowelling himself. |
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rxk22
Joined: 19 May 2010
Posts: 1629
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| Posted: Mon May 19, 2014 2:33 pm Post subject: |
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| Pitarou wrote: |
Absolutely spot on. There were other warning signs, if you kept your ear close to the ground, but that 36 hours of zero liquidity in 10 year JGBs is as clear s signal as you're going to get short of the finance minister publicly disembowelling himself. |
Yep, and as I see myself living here long termish, this is pretty bad. Most people think that since the Japanese debt is mostly held by the Japanese, that it can just print it's way into the black. Well that can happen, but it will topple the govt to say the least.
BTW, know anyone who owns stock in a Japanese brokerage? All the Japanese that I know own whacky stocks like Japanese wine makers and other off the wall nonsensical type holdings. Wonder if anyone owns the decent Nikkei securities ie Toyota, MFJ bank, Honda, Torei, and the sort?
Just curious, as with the yen in the future going down in value, the profits are going to be up. In yen at least. |
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Pitarou
Joined: 16 Nov 2009
Posts: 1116
Location: Narita, Japan
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| Posted: Mon May 19, 2014 3:11 pm Post subject: |
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| rxk22 wrote: |
| Pitarou wrote: |
Absolutely spot on. There were other warning signs, if you kept your ear close to the ground, but that 36 hours of zero liquidity in 10 year JGBs is as clear s signal as you're going to get short of the finance minister publicly disembowelling himself. |
Most people think that since the Japanese debt is mostly held by the Japanese, that it can just print it's way into the black. Well that can happen, but it will topple the govt to say the least. |
I dunno'. Robert Mugabe's still in power. 
| Quote: |
BTW, know anyone who owns stock in a Japanese brokerage? All the Japanese that I know own whacky stocks like Japanese wine makers and other off the wall nonsensical type holdings. Wonder if anyone owns the decent Nikkei securities ie Toyota, MFJ bank, Honda, Torei, and the sort?
Just curious, as with the yen in the future going down in value, the profits are going to be up. In yen at least. |
I'm afraid I can't help you with that, but you're definitely thinking along the right lines. Although Japan being what it is, I would imagine you have to really know what you're doing to avoid getting eaten alive by commissions. If you find a decent Exchange Traded Tracker Fund, do please let me know.
By the way, I'd stay clear of investing in Japanese banks unless you really know what you're doing -- I don't know what their position is now, but historically, they've been heavily exposed to Japanese government bonds. |
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rxk22
Joined: 19 May 2010
Posts: 1629
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| Posted: Mon May 19, 2014 10:28 pm Post subject: |
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| Pitarou wrote: |
By the way, I'd stay clear of investing in Japanese banks unless you really know what you're doing -- I don't know what their position is now, but historically, they've been heavily exposed to Japanese government bonds. |
Mug is still rolling around isn't he? Yeah, no explaining that.
True, the exposure to Japanese govt bonds is a bit worrying. I would look into it some more before buying. I am not looking to buy anytime soon.
I know in Japan they still do the 100 block trade, which is pretty old fashioned. I am not sure on how much the commissions will be. Knowing Japan, and as you said, will prolly be pretty high. |
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rxk22
Joined: 19 May 2010
Posts: 1629
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| Posted: Mon Jun 30, 2014 12:03 pm Post subject: |
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http://asia.nikkei.com/Business/Trends/Market-share-rankings-show-value-of-acquisitions
Interesting
"American companies ranked first in the markets for 18 products and services. Japanese companies, including Toyota Motor, had the next-largest count, coming out on top in 11 categories. Sony came out on the top in three categories. Canon headed the list in two categories, including digital cameras."
Hitachi and Mitsubishi Heavy were looking at Alstrom, which fell through. I wonder what other acquisitions they and other Japanese companies will go after? |
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