Japanese Stocks: Highest Since 2008 Or Lowest Since 1984

Tyler Durden's picture

Conjuring Kyle Bass' recent explanation of the massive surge in the nominal price of the Zimbabwean stock market enabling the purchase of only 3 eggs, much is being made of the surge in Japan's Nikkei index (overnight up ~3.8% and the last few months). It would appear that, as we noted recently, the world forgets (quite readily) that 'real' and 'nominal' returns are quite different. With JPY collapsing at its fastest rate in a decade (relative to fiat and hard currency) to 33-month lows, is it any wonder that the nominal price of the stocks that represent the nation are surging to keep their 'value'. In nominal terms, NKY is at its highest since 2008; in real (gold) terms, it is laboring at its lowest since 1984 - which do you trust to judge your wealth?



(h/t MarketUpdate.nl)


Charts: Bloomberg

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thismarketisrigged's picture

japan sucks. not so impressive to be at highs in market when you are printing at a record pace.


japan blows.

The Mist's picture

Not really a record to go from near deflation to minor inflation...

Besides, one might wonder if gold is a good representation, due to it being unusually high thanks to fear among people and governments.

Boris Alatovkrap's picture

Gold price is inversion barometer of trust.

Panafrican Funktron Robot's picture

"Besides, one might wonder if gold is a good representation, due to it being unusually high thanks to fear among people and governments."

Unusually high relative to the major paper currencies?  In what sense?  Keeping in mind the absurd debasement of said paper currencies.  I would suggest it is unusually cheap in that sense.  

nugjuice's picture

I see your "unusually cheap" because of the debasement of paper currencies and I'll raise you "unusually cheap" due to market manipulation

Cognitive Dissonance's picture

"In nominal terms, NKY is at its highest since 2008; in real (gold) terms, it is laboring at its lowest since 1984 - which do you trust to judge your wealth?"

Where you stand depends entirely upon where you sit....meaning that often your beliefs and grasp of 'reality' is based upon your perception of the world from your point of view. This is why for all practical purposes perception is reality.

This is also why for thousands of years the way to power is thru perception management among the masses.

<There is no spoon inflation Neo.>

orangedrinkandchips's picture

Thank You Tyler.....wtf?? Nikkei up almost 4% on the day??


I find no answers.....none. Did I get a bad quote? Bloomcock wrong?

Cognitive Dissonance's picture

The Governer of the BOJ is resigning 6 weeks earlier than his expected exit date of early April. This means that the possibility of the BOJ serving up extra cups of Kool-Aid even sooner than expected has just gone way up.

<Bartender, set up the house on me.>

fuu's picture

I was thinking it was Abe wanting to unleash the wage spiral as the printing is not doing jack shit anymore. Needs moar velocity.

Cognitive Dissonance's picture

Your explanation for the present day insanity sounds just as good as mine.

<Moar? You want MOAR?>

Harbanger's picture

This may buy the dollar a little more time as people focus on Japan.

SeattleBruce's picture

And the paper currency basket continues to represent less and less of the real economy, as do the stock markets.  They go up or down relative to other fiat, and the real economies worsen.  The bubble bursting, the house of cards imploding will be reality hitting the fiat/CB window dressing square in the face.  There's something to All Risk No Rewards discussion of what TPTB really are trying to do here (that they don't yet or even ever want hyperinflation), but my question is, with out of control events happening in countries like Argentina, Spain, Greece, Ireland, Egypt, et al, and the massive debt load happening all around, do TPTB really have as much control over inflation/recession/depression/depressionary deflation as we think?  I personally think that we'll see waves of deflation (like we've seen in housing for at least 4 years, with perhaps slight cratering at the bottom recently), and waves of inflation (like we've seen in health care, energy, and college tuition), sometimes at the same time, and it's very possible that during the waves of inflation, TPTB finally lose control of the whole shebang.

These are interesting charts looking at inflation and gold back to 1980.  Even by the measure of the US's sort of tamed down inflation (relative to say Argentina), the middle class that didn't hold PMs or other hedging investments (farmland), have gotten slaughtered.


wagthetails's picture

nice call ZH.  hilarious. 

jump in the markets and ride the inflation up, getting out before the violent burst will be the hard part.

firstdivision's picture

Didn't anyone use some of the $4B in POMO money today to by some NKY?

Glass Seagull's picture



Gold:  the objective denominator.

Whizbang's picture

What's amazing about it is that this enormous bubble of cash was printed by the JCB then absorbed by the billionaires of the world over the last 20 years while the wealth of the average Japanese citizen was hit extremely hard by inflation (i.e. 1000$ watermelons and 200 square foot apartments). This money is now in private hands and has been removed from the markets.

To keep this from becoming readily apparent, Japan has transferred many essential services onto the back of the government, which supports itself by borrowing huge sums of money from the same billionaires at interest rates somewhere between 3% and 7%  over the same period.

So basically, what this chart shows is a bunch of billionaires using a central bank  to steal money from the middle class through inflation, hiding the theft through the socialization of risk, and then charging them compounding interest to borrow money to replace the money that was stolen in the first place. It's really breathtaking if you think about it.

This is currently happening here as well, and has been for quite some time.

SDRII's picture

Japan remains the principal US geopolitical pawn in Asiapac. The Yen lever (& for that matter the western asset reflationary carry trade) fit neatly into that definition. Look no further than the rotating PMs since Elvis departed and the timeliness of the scandals that break going back to the Sk patrol boat incident, the Okinawa base protests over relocation fixed wing deployments, to the island flare up (& trawler incidents), to the Vietnam embrace and finally Ozawa's fundraising habits (Ozawa of the more independent foreign policy crowd; since cleared). Viewing Japan through an economic prism defies the most basic logic; the country is a geopolitical tool and one that is becoming increasingly useless (ful) depending on your perspective of the US Asia pivot. Bass may be right on the Yen/debt/demos but his thesis appears to mistake tactics and strategy.

Note that TEPCO just signed a 20 Year deal to buy US fracked gas...

Whizbang's picture

Well, it's a little more than a tool of the u.s. in asiapac.