The Endgame: Japan Makes Another Move

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Tue, 12/27/2011 - 10:56 | 2013443 DaveyJones
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They're trying to balance their debt levels with their radioactive

Tue, 12/27/2011 - 06:27 | 2012915 justsayin2u
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sounds bullish

Tue, 12/27/2011 - 02:46 | 2012780 hourglass86
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Japan imo is the biggest problem of the world economy alongside ofc UK and USA!

Tue, 12/27/2011 - 00:00 | 2012666 randomwalker
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So Japan is officially joining Euroland and the US at the 'Roach Motel'?

Mon, 12/26/2011 - 20:45 | 2012448 Eireann go Brach
Eireann go Brach's picture

US vs Japan! Whose bond market shall burst first is the question?

Mon, 12/26/2011 - 21:35 | 2012511 covert
covert's picture

wish it were arabia instead.


Mon, 12/26/2011 - 20:38 | 2012431's picture

The big buyers of JGB's in Japan are now net sellers.  The savings rate has declined from 16% to 2% and headed negative. The trade surplus is now in deficit.  The earthquake has made their fiscal situation worse.  Japan Post Holdings is the largest financial institution in the world ($3.5 T).  It is the largest holder of JGB's and it is no longer growing.  75% of assets are in JGB's and they also want to diversify.  GPIF is the Japanese retirement fund with 70% of assets in JGB's.  They are liquidating $80 billion of JGB's this year to fund benefits and more next year. There is no money behind the JGB's.  JGB Issuance is like 174 Trillion yen ($2 trillion) plus $80 billion of JGB's in the retirement fund must find new owners.  Kyle Bass calls Japan a Giant Ponzi scheme that is running out of time.

There is no exit because it is mostly being caused by demographics.  The old people are very conservative and have placed huge sums in the banks, insurance companies, Japan Post and the Retirement fund.  CD's yield less than 1/2%.  Bank deposits are double those of the United States; yes that is true.  Retirees must withdraw principal to fund living expenses or insurance companies must liquidate bonds to pay death benefits.  Young workers are generally contract workers and are not making enough to save much.  Most all of the banks and insurance companies are going to watch total assets decline and they are already loaded with JGB's.  The Foreign exchange reserves would not fund their deficit for two years. They are running out of options.

Mon, 12/26/2011 - 22:17 | 2012549 disabledvet
disabledvet's picture

It's one of the oddity's of the US Postal Service. They're making it smaller! Say what? Who's gonna buy all that debt you're issuing? NOBODY? Hardy har har! You people really are bought and paid for!

Mon, 12/26/2011 - 20:27 | 2012425 espirit
espirit's picture

Systemic takedown inprog.  When debt swaps are no longer fashionable, those with tangible assets held by others will end up holding an empty bag.

Enuf said?

Mon, 12/26/2011 - 20:19 | 2012415 CTG_Sweden
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It seems as if Japan has to increase taxes to Western European levels.

That would reduce aggregate demand in the economy drastically and increase unemployment. Perhaps Japan could compensate for that by printing money and let the government invest in wind mills that would reduce the need for imported oil. That would improve their balance of payments and increase domestic demand in the future, not just during the construction phase. In any case this seems like a better idea than building bridges and roads which nobody really needs for money borrowed from the the general public.

Mon, 12/26/2011 - 19:16 | 2012342 CustomersMan
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    Japan needs to get to the bottom of who, how and why Fukishima happened and disclose what they know to the world.


   That disaster is beyond comprehension and there's a LOT more to the story than what the world has received so far.


   I think they, JAPAN,  would gain much sympathy and additional help if they came "Clean" on the whole story. But thats just me. There may be lessons there for the rest of humanity, and the rest of the good people around the world would appreciate the TRUTH.


   Any way you slice it the true story will come out. Its to BIG and too painful to be kept secret much longer.


  Stuxnet and how it was introduced into the control systems would be a good place to begin, and what else was in and around the site actually ties for first.

Tue, 12/27/2011 - 03:48 | 2012792 Freddie
Freddie's picture

WTF? Stuxnet? WTF does to do with Fukishima?   Someone posted here and I read elsewhere (with pictures) that the maintenance was a joke at the plant.  The Yakuza hired lackeys to do the work. Pipes running everywhere, everything jury rigged - a real nightmare.   Nothing gets done in Japan without the Yakuza and they are like the American unions and Chicago Democrat Mafia.

Supposedly the pipes cracked during the earthquake so they were f**'ed before the tsunami hit.  40 to 50 year old General Electric crap technology with FU cast container vessels that were badly cast in Japan.  A whistle blower wrote a book about them and got major aggrivation.  GE/Obama bringing good things to life.  Sh*t technology maintained by gangsters with pipes jury rigged every which way.  Fuel rods stored on the roof.

Clean up and fix the site?  Sort of like cleanup the debt of the rapidly going bankrupt USA.   Sort of like clean up Chernobyl that has an area of exclusion for hundreds or maybe thousands of years.

Poor Japan.  Everything is going wrong there.  Too much debt that is beyond the point of return along with their demographics.  It is like watching a country die.  Very sad.

Tue, 12/27/2011 - 09:09 | 2013183 ZippyDooDah
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The unions run America and the Yakuza run Japan.  Hmmm.

You're a moron.

Fred is dead.

Tue, 12/27/2011 - 04:28 | 2012824 Fuh Querada
Fuh Querada's picture

The current scandal with the Olympus Optical company highlights all that will never change in Japan. Olympus bought 1.7 billion $ of Mickey mouse companies and paid huge fees to non-identifiable recipients in the Cayman islands to cover up stock market speculation losses ("tobashi"). The (British) whistle blower was hounded out and is likely to lose his fight to replace the entire board because no Japanese shareholders support him and corporate Japn will provide loans and new ahareholders to support the old board- business as usual.

Mon, 12/26/2011 - 18:52 | 2012314 non_anon
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pachinko anyone?

Mon, 12/26/2011 - 18:42 | 2012302 Winston Smith 2009
Winston Smith 2009's picture

"somehow reverse the falling birthrates"

There's a real biggie that wasn't adequately covered in this column. 

Kyle Bass: Japan is Doomed

Mon, 12/26/2011 - 20:54 | 2012460 Zgangsta
Zgangsta's picture

They don't have to reverse falling birthrates.  All they have to do is relax immigration rules.  There's plenty of people all over Asia that would come to Japan to work all the low paying jobs that Japanese themselves don't want to do, goosing consumption and tax revenues in the short term.

But if Japan becomes so beaten down that they would seriously consider destroying the social wa by doing this, then that is the point where we really know that they are beyond the point of no return...

Tue, 12/27/2011 - 00:51 | 2012711 vxpatel
vxpatel's picture

This would destroy what little is left of their social structure and these imports would export their savings to their destitute families in other parts of Asia...wouldn't help the economy at all...also, real estate is crazy comers simply can't afford to 'buy' into their society.

Mon, 12/26/2011 - 18:50 | 2012253 gangland
gangland's picture

METI Ozawa DPJ LDP Amakudari should all be fired

bunch of bent-over sellouts

the land of the rising sun

more like the land of the sinking corium

really makes me sad, i was going to live there

Mon, 12/26/2011 - 22:21 | 2012555 disabledvet
disabledvet's picture

between you and "zgangsta" above i'm sure the Japanese people were really looking forward to it as well!

Mon, 12/26/2011 - 17:20 | 2012203 Sudden Debt
Sudden Debt's picture

Don't worry!
The chinese will give us all the money we need and work it off for the next 6000 years. That's the costprice for their lavish lifestyle!

Mon, 12/26/2011 - 22:29 | 2012565 disabledvet
disabledvet's picture

So what's your take on the whole "we don't want to be the dumb money" thing that the Chinese keep yammering about SD? How would you "rate their performance"?
minor injuries in this matter as well?

Mon, 12/26/2011 - 16:49 | 2012153 Schmuck Raker
Schmuck Raker's picture

Two shills' postings in a row at the start of the comments has GOT to be an inflection point of something.

Mon, 12/26/2011 - 16:37 | 2012143 ChasVoice
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Two Thirds of U.S. Foreign Aid is Really Military Aid

And Japan is a big part of it along with Israel, of course.

Tue, 12/27/2011 - 14:58 | 2014250 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Don't forget Egypt, Suadi Arabia, South Korea and the biggest military aid recipients: Europe

Mon, 12/26/2011 - 16:25 | 2012133 Georgesblog
Georgesblog's picture

The boom is going bust, all over the world.  Now, it's a question of who picks up the pieces.

Tue, 12/27/2011 - 13:37 | 2014005 Lucius Corneliu...
Lucius Cornelius Sulla's picture

The question to me, and most investors is WHEN.  The entire market is controlled by the whims of political hacks and their stimulus.  Can kicking goes on and on and ...

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