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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Mon Dec 21, 2015 5:12 pm 
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Toshiba forecasts massive $4.5 billion annual loss - -> http://money.cnn.com/2015/12/21/investi ... g-scandal/

Quote:
Toshiba expects to post a $4.5 billion loss this year as it deals with the aftermath of a massive accounting scandal.
The estimated loss is significantly higher than analysts had expected, and is six times more than the 90.5 billion yen ($734 million) loss it posted for the first half of the year.
Some of the losses are associated with a huge restructuring plan Toshiba announced Monday. The company will cut about 6,800 jobs in its consumer electronics divisions by the end of March, and another 1,000 employees at its headquarters, according to company statements released after markets closed in Tokyo.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Fri Jan 29, 2016 12:00 pm 
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Japan goes negative

Surprise move to negative interest rates

Quote:
The Bank of Japan unexpectedly cut a benchmark interest rate below zero on Friday, stunning investors with another bold move to stimulate the economy as volatile markets and slowing global growth threaten its efforts to overcome deflation.

Global equities jumped, the yen tumbled and sovereign bonds rallied after the BOJ said it would charge for a portion of bank reserves parked with the institution, an aggressive policy pioneered by the European Central Bank (ECB).

"What's important is to show people that the BOJ is strongly committed to achieving 2 percent inflation and that it will do whatever it takes to achieve it," BOJ Governor Haruhiko Kuroda told a news conference after the decision.


http://www.reuters.com/article/us-japan-economy-boj-decision-idUSKCN0V70A7


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Fri Jan 29, 2016 1:29 pm 
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mr_anderson wrote:
Japan goes negative

Surprise move to negative interest rates

Quote:
The Bank of Japan unexpectedly cut a benchmark interest rate below zero on Friday, stunning investors with another bold move to stimulate the economy as volatile markets and slowing global growth threaten its efforts to overcome deflation.

Global equities jumped, the yen tumbled and sovereign bonds rallied after the BOJ said it would charge for a portion of bank reserves parked with the institution, an aggressive policy pioneered by the European Central Bank (ECB).

"What's important is to show people that the BOJ is strongly committed to achieving 2 percent inflation and that it will do whatever it takes to achieve it," BOJ Governor Haruhiko Kuroda told a news conference after the decision.


http://www.reuters.com/article/us-japan-economy-boj-decision-idUSKCN0V70A7


Just the next step in the currency war - nothing to do with "monetarist" ideas that it increases lending. Remember, banks don't lend reserves, so now they'll just move any excess reserves into government bonds (which are really just reserves with a term). Net effect will: 1) lower government yields, 2) reduce interest payments to private sector, 3) weaken currency and that's their main aim.

I think the most interesting thing here, and it shows how little most macro-driven market participants actually understand what's going on, is that it was really the weakness of JPY vs USD that forced the Chinese to devalue their Yuan - because Yuan (being pegged to USD) vs Yen was increasing far too much for Chinese competitivity.
So China devaluing their currency drops the stock market 10% -- but Japan doing the same today (and essentially pressuring China to devalue again) puts stocks up :lol:

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Sun Jan 31, 2016 5:08 pm 
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"Pandora's Box Is Open": Why Japan May Have Started A 'Silent Bank Run' - -> http://www.zerohedge.com/news/2016-01-3 ... t-bank-run


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Sun Jan 31, 2016 8:15 pm 
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BoyRacer wrote:
"Pandora's Box Is Open": Why Japan May Have Started A 'Silent Bank Run' - -> http://www.zerohedge.com/news/2016-01-3 ... t-bank-run


Even for Zerohedge - that's an awful lot of shite in one article.

Since inception Zerohedge has been calling the collapse of the Japanese financial system, one would think they might question their diagnosis; alas these days conviction masquerades as knowledge.

As I said, negative rates are functionally just another tax on deposits; and in this instance one more bullet in a misguided currency war.
QE increases reserves; negative interest rate decreases reserves; but the monetarists try to tell you they both have the same effect, increased lending :lol:.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Feb 02, 2016 9:08 am 
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Japan may ultimately follow own advice to China - capital controls, - Reuters column.

Quote:
Japan's move to negative rates is unlikely to spark a revival in bank lending; instead it will give banks and others an incentive to sell their yen bonds and buy overseas assets, thereby driving down the value of the yen. Right now the BOJ is buying bonds faster than the government is issuing them, becoming the nation's de facto financier of first and last resort.

To be sure, that state of affairs can long continue, but the distortions that negative interest rates introduce, or make worse, in the financial system may ultimately put Japan in a corner where capital controls seem attractive.

Carl Weinberg, economist of High Frequency Economics, points out that the fall in interest rates will cause huge problems for Japanese banks, insurers and pension funds with very long-term liabilities, which will be unable to replace existing bonds as they mature with ones that yield enough to allow them to satisfy their obligations.

That leaves the Japanese with few natural buyers of government bonds other than the BOJ.

"This means the BoJ can never stop buying Japanese government bonds without defunding the government. There is no exit strategy from QE that does not wipe out the public finances," Weinberg wrote in a note to clients.


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Feb 02, 2016 12:33 pm 
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Coles2 wrote:
Japan may ultimately follow own advice to China - capital controls, - Reuters column.

Quote:
Japan's move to negative rates is unlikely to spark a revival in bank lending; instead it will give banks and others an incentive to sell their yen bonds and buy overseas assets, thereby driving down the value of the yen. Right now the BOJ is buying bonds faster than the government is issuing them, becoming the nation's de facto financier of first and last resort.

To be sure, that state of affairs can long continue, but the distortions that negative interest rates introduce, or make worse, in the financial system may ultimately put Japan in a corner where capital controls seem attractive.

Carl Weinberg, economist of High Frequency Economics, points out that the fall in interest rates will cause huge problems for Japanese banks, insurers and pension funds with very long-term liabilities, which will be unable to replace existing bonds as they mature with ones that yield enough to allow them to satisfy their obligations.

That leaves the Japanese with few natural buyers of government bonds other than the BOJ.

"This means the BoJ can never stop buying Japanese government bonds without defunding the government. There is no exit strategy from QE that does not wipe out the public finances," Weinberg wrote in a note to clients.


Yeah, that's all completely wrong too.
"wipe out public finances" :roll: all rubbish.

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Profits = Investment – Household Savings – Government Savings – Foreign Savings + Dividends

(i.e. company profits are directly fed, in part, by government deficits)

BANKS DON'T LEND RESERVES
As confirmed by the Bank of England


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Feb 02, 2016 1:20 pm 
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Japan is a creditor, so it could wipe out it's debt with its credit, so it's not that bad saying the BOJ is the only buyer of government bonds - fact is the government doesn't need to go to the markets. It's the usual manufacturing economy success story.

Except, the BOJ has gotten too involved and now buys up half of the Japanese ETFs in existence.

http://www.bloomberg.com/news/articles/ ... for-kuroda

So instead of giving back to the public - they are socializing the ownership of businesses - this is a recipe for disaster.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Feb 09, 2016 12:30 pm 
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The Japanese 10 year government debt went negative today for the first time ever.

Where do they go from here? They're already buying up all their bonds, they're already buying chunks of equities? Could we actually see some sort of helicopter drop of Yen for Japanese citizens?


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Feb 09, 2016 4:18 pm 
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Japanese Debt increasing, now greater than the combined GDP of Germany, France and the UK. Chernoble brought down the Russian (ruble) economy, could Fukushima do likewise to the yen.


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Sun Feb 14, 2016 10:28 pm 
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maryocarol wrote:
Japanese Debt increasing, now greater than the combined GDP of Germany, France and the UK. Chernoble brought down the Russian (ruble) economy, could Fukushima do likewise to the yen.


The Union of Soviet Socialist Republics had collapsed internally for a long time prior to Chernobyl and was coasting along on the back of high commodity prices, the ruling politburo just acknowledged it had run out of steam by the late 80s and chucked in the towel only to reorganise under Putin a decade later. In terms of scale the great patriotic war (world war II) and the purges preceding that war were a far greater disaster for the Russians and their satellites in terms of economic and human destruction. Chernobyl was coincidental to the Soviet collapse.

What will eventually finish off Japan, if they don't all die of old age will be the collapse of the Yen. The bankers and industrial conglomerates have been trying desperately to kill it for decades now, eventually they will succeed.

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Japan's 'Abenomics' on the ropes as yen soars, markets plunge - -> http://www.dailymail.co.uk/wires/afp/ar ... lunge.html

Quote:
Japan's bid to revive its once-soaring economy is on the ropes as an equity market bloodbath and resurgent yen threaten to knock Prime Minister Shinzo Abe's growth plan to the canvas.
Abe met with his hand-picked central bank chief Haruhiko Kuroda for an emergency meeting Friday amid huge volatility on global markets, which is wiping out the gains Abenomics has achieved since the premier swept to power in late 2012.
All eyes will be on Japan's fourth-quarter GDP data on Monday with many economists expecting a contraction of about 0.7 percent in the world's number three economy.



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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Feb 23, 2016 7:50 am 
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Home, office safes gain popularity - -> http://www.the-japan-news.com/news/article/0002757143

Quote:
Sales of personal safes have been growing since the beginning of this year. In addition to the start of the My Number system, the adoption of the negative interest rate policy by the Bank of Japan lurks in the background. Many consumers apparently are driven by an instinct for self-preservation, hoping to protect their personal information or deposits.

“Are you prepared for the negative interest rate?”

At a home center in Edogawa Ward, Tokyo, a point-of-purchase advertisement carrying the above message has been displayed since the beginning of February. This is because the store expects the negative interest rate will lower the interest rates on deposits, prompting more people to keep cash at home. According to the store, many elderly people and owners of small and medium-sized firms buy safes.

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Minus interest rates hit the "retirement assets"! Hit the all-deposits, government bonds, insurance, pension -> [google translate]


Say complaints to the negative interest rates emphasis only yield slow to bank "pocket money" maintain (1/2 page) -> [google translate]


Japanese satire - [Contributed] minus interest rates uneasy Watanabe -> [google translate]


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Thu Mar 03, 2016 10:25 pm 
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Just to point out how completely wrong those people predicting the implosion of Japan's bonds are.....

Japan issued ten year debt at negative interest rates this week.

Good post explaining why they've all been wrong here:
"Japan – another week of humiliation for mainstream macroeconomics"
http://bilbo.economicoutlook.net/blog/?p=33094

key point:
"The funds that the non-government sector uses to buy the bonds, ultimately come from the past deficits run by government in the first place!"
spot on.

_________________
Profits = Investment – Household Savings – Government Savings – Foreign Savings + Dividends

(i.e. company profits are directly fed, in part, by government deficits)

BANKS DON'T LEND RESERVES
As confirmed by the Bank of England


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Fri Mar 04, 2016 11:41 am 
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Quote:
Why? Because as the auction yields have gone negative, current bond holders who purchased the debt instrument at positive yields, will worry about having funds (from sales) which are only going to attract negative returns (losses). The smart strategy in that case is to maintain long positions.

That is mental, talk about picking up pennies in front of a steamroller! Trees do not grow to the sky. At some point bond yields will go the other way, and anyone trading on the edges of this thing will face wipe-out.


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Fri Mar 25, 2016 8:35 pm 
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Japan still can't generate inflation - -> http://www.telegraph.co.uk/business/201 ... inflation/

Quote:
Persistently low inflation has long been a scourge of the central bank, which unleashed the most ambitious set of monetary policy measures ever seen in a modern economy to lift Japan out of its malaise.
The Bank of Japan is purchasing 80 trillion yen in government bonds a year and has sent its main interest rate to -0.1pc to stimulate growth and lending in the world's third largest economy.
Prime minister Shinzo Abe has urged businesses to lift wages for Japanese workers in a bid to get inflation to its 2pc target by the end of the year. This ambitious aim has been held up by Bank of Japan governor Haruhiko Kuroda, but is now set to be revised down after last month's inflation numbers, said analysts.

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A Year in a Vanishing Japanese Town - -> http://www.ozy.com/true-story/a-year-in ... town/62978

Quote:
On the west coast of the most northern island of Japan, there is a village of about 7,000 people. Next year, the town will be even smaller. And the year after than, even smaller. Contrary to popular belief, there are places in Japan aside from Tokyo, Kyoto and Osaka — but they are dying.


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