The Global House of Cards Are Starting to Crumble: The Fed Looks To Exit Easy Money, Chinese Data Fails To Impress, And Japan And The Yen Are Hitting The Concrete Wall BIG TIME!!!
The Nikkei 225 has gone up like 40% since JANUARY!.
Money is flowing out of the bond market.
The Yen has devalued 25% this year.
25% devaluation when the year is almost halfway over is pointing
towards something. I wonder if we will see more of this same trend, only
growing exponentially faster.
In Weimar Germany, the stock market was one of the first refuges as people exited cash and bonds.
Let’s put it this way, if you owned Japanese Government Bonds
on Thursday last week, (let’s say the 10-year bond for argument’s sake)
you’re now ~25% poorer.
For a supposedly ‘risk free’ investment – the Japan government holds the printing press so will never default– this is a huge loss.
Big insurance companies and pension funds are running like hell. They
have TRILLIONS of these bonds and they’re losing value. They are
dumping cash into the only assets they know hold some value in a
currency crisis. http://www.bloomberg.com/quote/GJGB10:IND JGB Futures Halted (Again) For Biggest 2-Day Plunge Since Lehman; 5Y Yields Hit 13 Month Highs
Another night; another Japanese government bond futures halt. The
last 2 days have seen JGB prices plunge at the fastest rate since the
post-Lehman debacles in Sept/Oct 2008 smashing back to 13 month highs.
5Y yields are surging even more – trading above 34bps now (up from
9.9bps on March 5th). These are simply astronomical moves in the context
of JGB history and strongly suggest Abe & Kuroda are anything but
in control of the quadrillion Yen domestic bond market as they jawbone
inflation expectations into the psychology of the people. Of course, the
Nikkei is surging (now up 9% in the last 5 days alone) amid JPY
breaking above 102 (but for now it has rallied back to 101.80). Japnese
interest rate implied volatility is surging once again also (after its
epic collapse last week – which appears the worst-timed lifting of
hedges ever, or more like a lifting of hedges into an unwind of actual
long positions).
with 10Y JGB Futures prices seeing their biggest 2-day selloff since Lehman…
More at source: http://www.zerohedge.com/news/2013-05-13/jgb-futures-halted-again-biggest-2-day-plunge-lehman-5y-yields-hit-13-month-highs THE ECONOMIC COLLAPSE OF JAPAN IS NOW IN PROGRESS – ALL THE ELEMENTS ARE IN PLACE FOR A DEBT CRISIS http://investmentwatchblog.com/the-economic-collapse-of-japan-is-now-in-progress-all-the-elements-are-in-place-for-a-debt-crisis/ Ex-Soros Advisor Sells “Almost All” Japan Holdings, Shorts Bonds; Sees Market Crash, Default And Hyperinflation http://www.zerohedge.com/news/2013-04-14/ex-soros-advisor-sells-almost-all-japan-holdings-shorts-bonds-sees-market-crash-defa
This is helpful in explaining the basics of the clusterfuck:
The Fed looks to exit easy money, Chinese data fails to impress
Asian markets were mostly lower in overnight trading, but the Nikkei was up 1.2%, hitting a 5.5-year high on yen weakness. Europe is selling off, and U.S. futures are lower.
Fed Maps Exit From Stimulus Timing of Wind-Down Is Uncertain, but Focus Is on Managing Unpredictable Market Expectations http://online.wsj.com/article/SB10001424127887324744104578475273101471896.html?mod=WSJ_hps_LEFTTopStories NOMURA: It’s Time To Place Your Bets On The Comeback Of The US Dollar
Nomura currency guru Jens Nordvig writes: The turn in JPY (yen) has been dramatic and has proven the
importance of momentum when a multi-year cycle turns. A similar dynamic
could be in store for the dollar. In the scheme of things, the USD REER
(Real Effective Exchange Rates) is still trading close to multi-decade
lows. Once the turn is evident, we believe momentum could be powerful. On this basis, we think it is now time to put on some
structural positions, looking for meaningful USD gains by year-end. We
structure these positions to be resilient to near-term two-way risk. We
would also look to add spot exposure should we better entry points be
reached over the next one to two months.
Read more: http://www.businessinsider.com/nomura-its-time-to-place-big-bets-on-the-comeback-of-the-us-dollar-2013-5#ixzz2TAkwhUFQ Andy Xie: Strong Dollar Could Cause Next Global Financial Crisis
As the U.S. economy recovers, a strengthening dollar might cause the
next financial crisis, warns Singapore-based economist Andy Xie.
“The first dollar bull market in the 1980s triggered the Latin
American debt crisis, the second the Asian Financial Crisis. Neither was
a coincidence,” Xie writes for Caixin Online, a website specializing in
China’s financial and business news.
When the dollar is in a bear market, liquidity flows into emerging
markets, causing their currencies and asset prices to appreciate, which
supports domestic demand.
Read more: http://www.moneynews.com/Economy/Andy-Xie-strong-dollar-crisis/2013/02/08/id/489498
Gold Bears Pull $20.8 Billion
Fund Outflows
Money managers withdrew $1.27 billion from gold and precious-metals
funds in the week ended May 8, according to Cameron Brandt, the director
of research for Cambridge, Massachusetts-based EPFR Global, which
tracks money flows. This year’s outflows of $20.8 billion are the
largest withdrawals since the firm began tracking the data in 2000.
No comments:
Post a Comment