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Category Archives: Japan

Add BoJ and ECB to PBoC efforts to stop a market drop 2 weeks ago

Two weeks ago I wrote a brief blog post saying the PBoC was buying across the board – equity index futures, forex, bonds —all to stop a stock market drop. It worked for a few hours. link here  Turns out the ECB and BoJ were busy as well. The ECB turned its QE printing press to 11 for a few hours and vacuumed up European […] Read the rest of this entry »

BOJ spikes punch bowl

The BoJ has expanded its already mammoth QE program from 60-70T yen/year ($537-630B) to 80T yen/year — to purchase more JGBs. In fact, the BoJ is going to buy up to 6.6T yen/month in JGBs ($60B USD/month.).  To finance the gaping budget deficit 5.5T yen/month is needed. So yes, this is textbook monetization.  FYI:the Fed’s QE3 program was initially $40B/month before it had to […] Read the rest of this entry »

Japan update

There’s a good article in this morning’s FT about Japan.  The BoJ has lowered economic growth and inflation estimates.  It will continue to hit the ctrl-P button at an annualized 60-70T yen pace ($550-640B USD), but no new policy moves were announced. How would you like to be a Korean or German exporter?  At some point the plummeting Japanese yen is going to be […] Read the rest of this entry »

Japan’s flat economy

Per my comments in the newsletter yesterday -and as expected- the Japanese economy stumbled badly in Q2, contracting at an annualized -6.8% rate. This was a result of the 3% increase in their national sales tax.. Effectively, consumers pulled their purchases into Q1 -which saw a 6.1% growth posted -though this figure was revised down from earlier estimates (+6.7%). Similarly, Q4 2013 was revised […] Read the rest of this entry »

Japan: Bond market says beware

Here’s a chart on the JGB 10yr yield…. Never mind that you need a magnifying glass to see the yield (0.54%!!), I want to draw your attention to the fact yields have steadily dropped this year.  This is not what a sovereign bond would be doing if the economy were strengthening with any sort of durability.  And what about that yield?   It says […] Read the rest of this entry »

Japan’s beggar thy neighbor QE is going to make enemies

There’s a great story in the weekend FT (Japan in danger of missing 2020 budget target). The upshot: Japan is not likely to meet its year 2020 target to produce an annual budget with no new debt. Japan has the worst demographic profile and debt to GDP of any developed country. How Japan escapes this mess without a decade-long depression is beyond me. Their […] Read the rest of this entry »

Iron Maiden pension fund reform “Can I play with madness?”

  This morning I was propelling my 17yr old son through the ritual of getting to the school bus (always fun at 6am).  He’s a talented guitar player and likes a wide range of music, but is partial to ’80s rock and metal (safe to assume I had something to do with that).  Iron Maiden’s Can I play with Madness? was playing (that’s his music, […] Read the rest of this entry »

The Top Cometh…

  The view presented by the greedometers still indicate April is the top for risk assets and that the economic slowdown of 2012 – 2013 began earlier this year. The US economy will probably slow to the point where it stalls completely and falls back into recession in the current quarter. The book (Greedometer. Dow 5000. Why nobody sees it coming.) will go into […] Read the rest of this entry »

Short Economic Stories March 10 2012

The greedometers are increasingly suggesting that we’re currently in the warm-up act a few months before a secular top in risk assets. (More in the private client letter on Wednesday.) In addition, talk about low trading volume. Wow! Watching Friday’s equity markets, you would have thought two guys were buying and selling. When only 300M S&P500 company shares have traded by 3pm, you know […] Read the rest of this entry »

Short Economic Stories Feb 17 2012

In the US: •For years I have commented that S&P500 profit margin is one of the best mean reverting series of economic data there is. The final stock market peaks of 2000 & 2007 coincided with turning points when profit margins began retreating from their peaks. •Notice -like all mean reverting series- the larger the area above the average (green area), the larger the […] Read the rest of this entry »