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And Now The Facts About Retail Appetite For Japanese Bonds...

Tyler Durden's picture




 

One of the more persistent, and pernicious, misconceptions about the unshakable - at least to date - tower that is Japanese debt, all Y1 quadrillion of it, is that there is no need to worry (literally, see prior) because the bulk of it is held by retail, i.e., domestic household, investors and as long as that is the case, nothing can possibly go wrong: after all the Japanese population holds its own debt, and as such is a beneficial creditor to the world's largest sovereign debtor. Alas, as so often happens with conventional wisdom, it just happens to be completely wrong. And while one may be entitled to their own opinions, the facts in this case belong squarely to the Japanese Ministry of Finance. The Japan MOF chart below summarizes the true state of retail appetite for Japanese bonds. In the wise words of Dennis Gartman, the chart is unmistakably headed from the top left to the bottom right, in perfectly obvious terms.

Source: Japanese Ministry of Finance

 

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Sat, 11/17/2012 - 14:11 | 2991895 williambanzai7
williambanzai7's picture

PLEASE TO RAMEN CALM

Sat, 11/17/2012 - 14:31 | 2991929 prains
prains's picture

please

Do not feed the pussies

Sat, 11/17/2012 - 14:43 | 2991953 Silver Bug
Silver Bug's picture

Stay far far away from bonds in general!

 

http://schiffblog.blogspot.ca/

Sat, 11/17/2012 - 15:03 | 2991993 hmmtellmemore
hmmtellmemore's picture

I take it Peter Schiff was unable to make any money on this current US bond bubble due to his political slant?  Not good for an invester, best to leave your politics aside.

Sat, 11/17/2012 - 19:42 | 2992508 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Schiff bet wrong on many fronts over the last year.

Sun, 11/18/2012 - 00:21 | 2992985 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

I'm sure that if they paint and cover the fukushima plant with some Hello Kitty, everything will be fine

Sat, 11/17/2012 - 14:12 | 2991896 Stockmonger
Stockmonger's picture

Distribution, bitchez.

Sat, 11/17/2012 - 14:57 | 2991982 Zero Govt
Zero Govt's picture

Spot Exit..

"Stampede!!!"

Last man out switch the lights off ...another Govt-wrecked economy for the scrapheap.

Sat, 11/17/2012 - 14:47 | 2991899 fonzannoon
fonzannoon's picture

Bass (Japan first)

Schiff (U.S first)

Gartman ("The gold bubble has popped") -1 trillion

Sat, 11/17/2012 - 14:16 | 2991908 B-rock
B-rock's picture

How does retail bet on this mess? Kyle Bass-ish

Sat, 11/17/2012 - 14:28 | 2991910 Everyman
Everyman's picture

OMG Banzai indeed!  Well done William!

"Please to reamain calm" Bitchez!

Sat, 11/17/2012 - 14:30 | 2991922 kaiserhoff
kaiserhoff's picture

Not a cat person, but that's purrfect.

Sat, 11/17/2012 - 14:33 | 2991926 Popo
Popo's picture

This is going to be yentertaining.

Sat, 11/17/2012 - 14:37 | 2991942 Popo
Popo's picture

My nippons are erect.

Sat, 11/17/2012 - 15:53 | 2992094 debtor of last ...
debtor of last resort's picture

Fuckushima'd

Sun, 11/18/2012 - 16:26 | 2994204 Catflappo
Catflappo's picture

CATastrophe

Sat, 11/17/2012 - 14:39 | 2991944 Mine Is Bigger
Mine Is Bigger's picture

I thought the argument was "held DOMESTICALLY," and not "held by WHAT CLASS OF INVESTORS."  The chart doest not show how much is held by Japanese entities, such as Yucho and Kampo (postal savings and insurance) and Nokyo (agrigultural cooperatives).  After all, Japansse people are famous for keeping most of their financial assets in savings.  Very few individuals invest in government bonds.

Sat, 11/17/2012 - 20:13 | 2992556 patb
patb's picture

well the fukushima evacuees are burning through savings at a frightening rate.

Sun, 11/18/2012 - 04:10 | 2993216 Ampontan
Ampontan's picture

Excellent point, but very few people pay attention to what is actually happening in Japan.

The Japan Post share of the holdings alone accounts for 20%, and that doesn't include other financial institutions, power companies, etc.

Sat, 11/17/2012 - 14:41 | 2991949 Duke of Con Dao
Duke of Con Dao's picture

nothing to do with Japanese... maybe Japanese men might like...

YouTube - Potty Mouthed 10 Yr Old Palestinian Girl Opens a Can of Kick Ass on Israeli Soldiers

Sat, 11/17/2012 - 14:41 | 2991951 Quinvarius
Quinvarius's picture

Dennis Gartman has no wise words.

Sat, 11/17/2012 - 14:46 | 2991962 RhoneGSM
RhoneGSM's picture

Fading him can be wise

Sat, 11/17/2012 - 15:09 | 2991999 TWSceptic
TWSceptic's picture

One of the best contra indicators, just recently he made a prediction of 1400- gold (right before it went up again), you can basically interchange his appearances with a big BUY GOLD sign.

Sat, 11/17/2012 - 14:45 | 2991957 RhoneGSM
RhoneGSM's picture

B-rock

If you think yen is finally ready to break YCS is double short ETF.  JGBS is short JGB.  Could take awhile to work.

Sat, 11/17/2012 - 14:50 | 2991967 Popo
Popo's picture

Dangerous play.  The chances are good that Dipshit Bernanke will buy the bonds from the BoJ.  You'll lose your shirt.   In his mind it's totally justifiable to bail out other central banks in the name of "stability".

 

Sat, 11/17/2012 - 14:46 | 2991960 bania
bania's picture

"wise" and "Gartman" in the same sentence. Tyler your grammar checker is broken.

Sat, 11/17/2012 - 20:39 | 2991969 Zero Govt
Zero Govt's picture

Land of the Rising Sun soon to be the land of the Setting Sun

..especially when you tee-up a nuclear plant in Tsunami Alley

 

Sat, 11/17/2012 - 14:52 | 2991973 lordchimp253
lordchimp253's picture

Japan has $1 trillion in US debt.

When they get into serious trouble, they will sell it and buy Yen.

Japan will be one of the last dominoes to fall.

 

Sat, 11/17/2012 - 15:01 | 2991987 hmmtellmemore
hmmtellmemore's picture

How exactly does one sell $1 trillion in paper, and who would the the biggest buyer?

Sat, 11/17/2012 - 20:35 | 2992604 negative rates
negative rates's picture

You tell your broker, timmy, that you are not turning over your debt this month and we would like to--as you might say--"cash out" at the tune of some $100 billion dollars per month for the next year. To pay for tsunumi damage and rebuilding, we will be switching from nuclear to fossil fuels causing the price of a bbl of oil high for the foreseeable future. Hope your check don't bounce or we will send bruno and rocco over there to balance your books.....See how easy that was.

Sat, 11/17/2012 - 15:14 | 2992024 Motorhead
Motorhead's picture

All right, where are the Kitlers?!?

Sat, 11/17/2012 - 15:19 | 2992034 Gloomy
Gloomy's picture

Tyler-

   Who is buying the difference?

Sat, 11/17/2012 - 18:59 | 2992428 magpie
magpie's picture

Oh, to behold central banks pricing out each other.

Sat, 11/17/2012 - 20:32 | 2992581 Zero Govt
Zero Govt's picture

Central Bwankers have one overwhelming priority to debauch their currency, to bailout the dead-broke stupid Govt (their boss) and prop-up the status quo of the major, equally dead-broke stupid, retail bwankers

whatever international ramifications of their policies are are close to irrelevant

just as Judges rarely rule against Govt you'll rarely if ever find a central bwanker that isn't also a crone to the system, they like to keep their jobs afterall.

So we have a central banking system that compounds stupidity (compounds politicians debt-spending mistakes and bankers gambling errors) error ontop of error and then craps it out like a muckspreader right across the nation through currency transmission

Govt : the most ignorant and inept institution in history 

Sat, 11/17/2012 - 19:53 | 2992519 GreatUncle
GreatUncle's picture

Japan "was" doing alright :-) able to rack up a humungous debt even though to all intents and purposes its banking system had collapsed because the rest of the world nations were still functioning.

Now look at it ... don't look so good now if anything Japan gone bust a decade ago would have weathered the storm and now be in a position to support the next one.

Somebody has to go bust, you just don't want them all to go bust at the same time.

Sat, 11/17/2012 - 21:53 | 2992712 bilejones
bilejones's picture

So,  Short the Yen.

The question is, against what?

All we've got is gold.

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