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Is It Beginning? Biggest JGB Price Collapse In Over 10 Years Triggers TSE Circuit Breakers
Just over 4 hours ago we discussed the stunning collapse in 10Y Japanese bond yields. Since then - things have taken a very dramatic turn for the worse for bonds. 10Y JGB yields have exploded higher. The move from 32bps to 65bps triggered circuit breakers on the Tokyo Stock Exchange in JGB Futures trading as JGB prices plunged by their largest amount since September 2002. We can only imagine there is liquidations galore occurring given the massive outsize moves we are seeing in Japanese bonds, stocks, FX, swaps, and CDS. Did the BoJ just lose control?
Now that is a reversal!!
Biggest price drop in JGB Futures in over 10 years
Is the BoJ losing control?
Charts: Bloomberg
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Nikkei has dropped down from its high by over 1% and still falling. Its plus 1.8% now. Was up over 3%
Guys! WTF they are just rotating from shit to shittier assets
One political failure after another. Seems to be catching like the flu. Perhaps the leaderships should all get vaccinations.
China = new government = war of words over some islands in the Pacific, PMI collapse and popping real estate bubble.
Cyprus = new government = blowup of Cyprus' banks.
France = niewe government = industrial output crash.
Italy = new government = threatened rejection of the euro.
S. Korea = new government = stiff relations with N. Korea.
N. Korea = new government = threats of nuclear war!
Egypt = new government = oil shortage and vanished forex reserves.
Japan = new government = NGDP targeting and bank runs.
All the EU/Japan/Chinese/Korean dudes had to do was nothing. There was stability of a sort. What now?
I think we need a lot of luck right now ... and no more new governments for awhile, okay?
I remain bullish on Ginsu knives.
New glow in the dark model, for when the lights go out.
Most important,
Have any derivatives been triggered !
If so who is at the loosing end?
And which Bank will now become the domino !!!
Convenient Timing..
... considering the "Cyprus Model" is in place ... and being discussed WW.
Scapegoat = Japan ?
Up to now Japan's money supply increase (balance sheet) looks to be fairly tame-
http://tinyurl.com/ca7poh4
That has got to be an interesting feeling buying jgbs at 32.5 bps and coming back a few hours later to see that you could have doubled your interest payments by waiting a couple hours.
doesn't that also mean your shiny new bonds are worth half what you just paid?
nope, you still receive the same principal at the end.
10y all the way to 0.65 ... Is this Skyfall?
Fire and brimstone coming down from the skies! Rivers and seas boiling!
Forty years of darkness! Earthquakes, volcanoes...
The dead rising from the grave!
Human sacrifice, dogs and cats living together... mass hysteria!
Quick subpoena Waddell & Reed and then put Kuroda on seppuku watch.
At this point the japanse need to take their savings and short SLV because everyone knows as currencies weaken, so do hard asset prices.
wtf is this shit? So you're tellin me that more JPYs in existence equals a lower silver price!?
This is the latest print I can get on JGBs right now.
Japan 10-Year [ 0.484] 0.451 0.488 0.320 0.033 [ 7.32% ] 6:15:19 gmt
so. which is it? Yields going up, or down? is that a negative 7.32%, or is that a holy fuck 7.32%?
Look at the debt to GDP and then think about what you wrote.
yeah ok positive 7.32%. i get that. But he's got brackets around 2 of the data pts. Sorry not to figure out the logical direction of a batshit crazy world.
http://www.bloomberg.com/markets/rates-bonds/government-bonds/japan/
switch from tens to thirty's, front running the BoJ purchases
9 bps up in the tens, (price down 0.9%) 9 bps down in the thirties (price up 2.5%)
I can't believe the bond market is calling out the BoJ. I thought it would never happen. Bet that carry trade is working out just fine for the FX traders?
carry them out
on their shields ..
Can we print the BOJ out of this mess? Of course Ben can, there is no limit on fraud and electronic printing of confetti.
Maybe an app to "print" some physical Gold ? (on the laserprinter...) lots of Gold ink. Maybe they will try Gold or Silver Certificates to bail out their sorry state...then of course there is all the military stuff and agitations. Japan is on a tough way down the road...further than most...a very 'advanced' state of affairs. Between China and NK, and Fukushima...its surrounded by good news !
Calm down everybody. Given the aging demographic it is highly unlikely there will be a bank run.
I do foresee however a surge in demand for adult diapers once the oldies shit themselves with fear.
As if it wasn't enough that they lived through Hiroshima they now also have to live through a home grown disaster.
Surge in demand for adult diapers... well, it Depends...
More adult diapers are sold in Japan than baby diapers.
Either way, I'm long diapers.
Given the aging demographic it will most likely be a bank limp or walking stick shuffle,but shuffle away,it will.
THIS IS THE END, MY ONLY FRIEND THE END!
"Please don't worry" - BOJ
Soooo - what's the Plan B?
There is no plan B. There is only Do Not Worry. You uninformed, paranoid Zerohedgers do not know how important, how central, and how much political capital has been invested in, Do Not Worry. Do Not Worry is the only plan.
Basehead Ben now has a bit of catching up to do...
This is serious?
Japan just blew up. Now the only way to save themselves (for a little time... maybe a week) is selling all their US bonds ($1 trillion)... who sells first survives.
Japan's debt is more than 225% of GDP . One quadrillion yen. $14T USD. (see http://www.zerohedge.com/news/%C2%A51086000000000000-quadrillion-debt-an... )
Interest rates for them just nearly doubled depending on which quote you use. Japan's tax revenue is about 28% of GDP and doing the math gives about $1.3T per year for revenue. Interest rates don't even need to hit 10% for Japan to enter a black hole where interest exceeds tax revenue, and don't forget that all this printing plus tax revenue is used to support the actual government spending. They can't afford to have them rise like this, and if this rise continues for long, they are super, super fucked. In reality rates much less than this will collapse their currency.
This is the bond market giving a big F-U to the latest announced Japenese QE, and could be the start of even bigger interest rate moves. ie Japan gets more fucked, even faster. Hence the headline "Is it Beginning?"
I should add in real terms this move (as of 1am pacific time) alone isn't anywhere near catastrophic, but if it keeps happening and a feedback loop starts, it's bad. Real bad, and futures are pointing at "real bad."
Don't worry, the Ben will do something... it will calm things down... for a while.
The word the kids use is "epic"... this will be an "epic" failure.
"sick"....
"sick" is good I think. The kids write "sick" on my car all the time.
Thanks seek, informative. Posters like you are what bring me here...
Here be Greg Hunter's Weekly News Wrap-Up for Friday 4.5.13:
http://www.youtube.com/watch?feature=player_embedded&v=2c7ldABJTFk
Kyle Bass is now a trillionaire. LULZ.
The Japs need to stop printing money and start printing kids....or robot kids......or make friends with the Chinese again.
Next step : sell all US treasuries.
I don't pretend to know what all this means. Many of you are more knowledgeable than I about bonds and such.
I do know that most of what I have been reading of late does not inspire optimism.
I read of more and more countries populations experiencing drastic drops in quality of life and standards of living as they are reduced to surviving.
I just hope that the pendulum starts swinging the other way for a bit, but am thinking it has to finish its current trajectory first.
The BOJ is simply doing what the Fed wishes it could do.
Take a look at the volume in precious metals since February. That should give you and idea that something suspicious is occurring. http://data.cnbc.com/quotes/%40SI.1/tab/2
Now if only the same thing could happen to the US bond market and make Bernanke and Krugman have heart attacks or be hanged by a lynchmob, that would be great, thanks.
You see - This is exactly what BB would like to see in the US.
The Asian markets opened minutes ago, and Japan's stock market is going nuts.
The Nikkei is up over 4 percent as the yen continues to tank.
Read more: http://www.businessinsider.com/nikkei-jumps-2013-4#ixzz2PZcIQ9AX
The bond market is much bigger than stocks.
Even smaller though is the commodity market. It'll occur to some bright spark eventually that real companies aren't going to be able to make enough income to justify the money going there. Then we'll see inflation really kick ass as the money from the bond market heads into commodities cos that's real tangible stuff. Give em a month or two to figure it out, maybe quarter end figures.
Someone on ZH still believes stock markets reflect economic reality? LULZ.
Do you believe in UFOs, astral projections, mental telepathy, ESP, clairvoyance, spirit photography, telekinetic movement, full trance mediums, the Loch Ness monster and the theory of Atlantis?
And just what did they think would happen? So long as the /es is rising, the general populace will absorb the increase in taxation to service the debt, right?
Unless... the yields get out of control... "Out of Control, Out of Control - Everybody's out of control".
Nobody will want to get paid in ever-decreasing in value toilet paper.
Course they didn't lose control. This was planned. Centrally... Very expensive people way out of my pay grade are making sure that everything will be just fine and dandy.
Is this Japan's financial Tora, Tora, Tora moment?
They are bombing the financial world with a QE policy whereby Japan INc prints n buys its bonds at the same time in circular knee jerks; the government/bank combine is awesome in its earth shaking momentum of money printing and bond buying.
All based on letting the Yen sink to make the economy competitive and kick start real growth again after 20 years of dold drums. Is this STIMULATION or is it financial simulation and desperate suicidal play where you lose control of the casino table?
This print machine now will go head to head with the FED printing trying to do the same thing in a super fragile behemoth economy three times the size of Japan; all the while Mutti imposes austerity in Euro world that takes the EZ down the road which Japan so desperately wants to leave in its current Tora, Tora financial play.
And what does Soros and Kyle have to say as the sit on the sidelines to make their short bets on Yen, CDS derivative plays or on bond interest rate spreads?
George Soros On Bank Of Japan - Business Insider
crazy world which digs its own financial graves.
If this is it you won't need gas. Leave your home and come back to nothing. Better stay at your home with your most precious metal.....LEAD.
All UN and diplomatic staff (along with all NGO staff) will evacuate N.Korea in the next few days #korea
#Philippines foreign minister tells reporters his country considering offering U.S. use of military bases there if #DPRK attacks.
KOCIS issues seemingly testy rejoinder to #ROK newspaper report about "foreign war correspondents rushing to Seoul"
Bullish!
Yeah, this shall be bad, but it shall not last long. Peace in the country!
http://www.youtube.com/watch?v=jirO9vcwGCU
Oh, and by the way: Fuck you Kuroda!
If and when this BOJ move all blows up, it will come to be called Harakirinomics. Death by a thousand (fiat) paper cuts, or Attack of the Origami Black Swans.
the day of reckoning is getting closer.... but, come on.... don't waste precious space with comments about a few bips move in the JGB. let's get back to the topic once 1.4 on the 10y is here.
HAHA. That did not take long. Kudo's Mr. Bass.
lol! the quadrillion yen coin in 3.....2.....1.....lol! does anyboby think they didn't know this would happen? does anybody think they didn't have a plan when it did happen?
the yen goes to 150 and the japanese smile for the camera dressed as an anime character flashing a peace sign to the world.
Haruhiko Kuroda, you'd better start writing the death poem...
John Mauldin has been saying that "Japan is a bug looking for a windshield", and that 2013 may be "the year of the windshield".
He also has said that when Japan hits that debt crisis windshield, it may be the trigger for a US government debt crisis coming thereafter!
how much did bass just make?
Time for more QE.
I have a MIT PhD.
80 years ago today, G-man took our gold away..........
those spikes are incredible.
why would JGB be worth anything anymore when your coupon is going to be worth 50% less than it was last quarter.
samurai swords are worth more and any sort of real asset.
the JGB futures chart looks like the way the SnP climbs...surely not.
So much for stabilizing markets and promoting confidence with central bank intervention.
If they want to save face now, they’re going to have to find the people who just ripped it off.
Even flying with partial panel is frought with dangers.
Wild oscillations and overcontrols eventually lead to crash and burn.
Bernanke "The U.S. gov't has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost." "Under a paper-money system, a determined gov’t can always generate higher spending and, hence, positive inflation."
That is, of course, until the proles figure out they've been devalued. So how is the U.S. getting away with its fraud on the global community? Unlike the kamikaze’s it neither admits nor denies culpability. The BOJ copied the first part of the equation, but failed in the second part.
History's biggest and most powerful standing military.
NK called and they would like to object to the first statement; Iraq and Afghanistan insurgents also would like to object to the second.