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Japanese Bond Market Halted At Open As Bond Selling Purge Goes Global
Japanese government bonds (JGB) futures have been halted once again this evening as the market opens down over 1 point. 10Y yields smash 11.5bps higher to 1.00% and 5Y yields add 6bps to 47bps. These are quite simply unprecedented moves in what 'was' a safe asset class and impresses yet another VaR shock on the market (as we detailed here). What this means practically is that Japanese banks push further into insolvency land (as we explained here) today's move wipes out another 1.5% of blended Tier 1 capital off the entire Japanese banking industry. Since the 10Y JGB yield lows of 32.5 bps on April 5, the move is rapidly approaching a full percentage point, or the parallel shift amount that the IMF warned would lead to 10% and 20% MTM losses for regional and major banks respectively. Today's jump in 10Y yields continues the post-BoJ regime of greater-than-six-sigma moves... something no risk model can withstand for three weeks. Just a good job the BoJ didn't have anything at all to say about this totally disorderly fiasco yesterday.
JGB Futures plunge to two-year lows...
leaving yields spiking...
10Y yields have now tripled from the post-BoJ meeting lows (in 7 weeks!!)
JPY is being sold like there's no tomorrow (which for the Japanese may well be true)
Meanwhile the Nikkei 225 is tearing hiugher once again - now up ovcer 85% from its Oct 2012 lows...
Charts: Bloomberg
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almost 1% on the 10y omg it's teotwawki
Shocking, don't see 10 bps every day.
A MUST WATCH video explaining the significance of this:
Japan's Debt Problem Visualizedhttp://www.youtube.com/watch?v=Njp8bKpi-vg
(4% yield is mathematical economic death)
The Yen follows next.
Wait, patiently,
tomorrow morning it blows up, and then, down.
omigosh.. why so ever would anyone not want to buy something that is depreciating by large amounts on a daily basis?
Being that I am still barely out of diapers when it comes to investing and finance, are there any books or other media than anyone could recommend to help me understand the world of bonds and terms like Tier 1, effects of bps, etc.? Many thanks.
Minsky! Minsky! Your moment is at hand!
Crack up boom boom?
maybe not until they burn the alleged Tier 2 capital which buttresses the system until the alleged deposits gets whacked by what is alleged to be a market.
:(
Minsky moment...very succinct explanation of what's going on...or aboout to. Thanks.
+1 for good ol' Hyman reference. (Steve Keen mentions him often, too.)
Bond shock, yield up price down(to account for future rollover into higher yield), bond derivatives, or vice versa, currency, hit down for sale, as carry realigned between maturities(curve realigned to new expectations) currency flattens.
Sell, hot money hiTs currency (the sale)(up), assets redistributed for yield.
This is my laymans take, i honestly have no clue wtf is up.
But I'm guessing it will keep happening.
Kyle Bass could probably explain it to ya.
Kyle Bass -- hell yeah!
I'll let you know next Thursday, thanks for the heads up.
+1. And Bass has too much class to rub it in their faces when he's proven right. I just want to see that humble shy "I TRIED to tell you so!" smile on his face when he gets interviewed by all the morons who tried to make him look like a fool over the years.
Watch kyle Bass explain bonds and how they can blow up sovereigns overnight just like we see happening here. Go to youtube and search on kyle bass. Whats happening in Japan recently in regards to bonds is a big fucking deal and the only question left is what king of domino effect will the blow have world wide...
Add to that Max Keiser. He's been calling for a JGB crash 6 months ago, predicting it would happen in april.
Just remembered I can save you some time. A couple of months ago, Interest on the japanese debt was one quarter of Japanese tax revenues. When interest payments = tax revenues, its game over.
Thats why Japan has had 10 FinMins in 5 years and why they either commit suicide or check into mental institutions after they quit...
Thanks Hulkster.
Rumors floating around that the next 2 days are going to be epic... The Nik potentially collapsing followed by the Dow... markets closing early, bank holiday... Happy Memorial day everyone!!
Again? I guess 2000th time might be the charm!
all takes in 1 time!
You know, when this shit finally blows, its going to be a horrible thing for us, but I'm hoping that these corrupt sons of bitches lose their goddamn heads...
This little blip is just a correction. The real crash requires the DOW to be much higher first.
The Nikkei is down a tad over 2% now.
Flacon, thanks for the link, looks like deep doo doo for Japan
Excellent video. Thanks.
http://nipponmarketblog.wordpress.com/
Maybe TheBeginningOfTEOTWAWKI -- but I feel fine.
Gee, what ever happened to ZIRP?
When you consider their population demographics, interest expense, deficit to gdp, and shear size of their debt: I can assure you going from 32 bps to 100 bps is indeed quite scary. How sad is it that a 2% yield on a 10 year bond is where one of the greatest western ponzi's ever declares game, set, match.
Indeed, I hope the sovereigns of the west like to play dominoes.
OK, but that increase in the 10yr yield is going to take ten years to feed into the Japanese government's bottom line, right? The banks will face some ugly mark-to-market losses in the mean time, but we solved that in the US by suspending the MtM rule.
It is quite amazing to watch grown adults trade this kind of nonsense. This is the very same kind of garbage trading that produced the SILVER FLASH CRASH on Sunday night. Martin Armstrong stated that the reason why the price of silver fell nearly 10%, because there were a lack of bids. How silly, it goes without saying -- especially in the thinly most traded time period of the day. Anyhow, I replied to Martin Armstrongs bearish silver commentary in the following post:
RESPONSE TO: Martin Armstrong’s “Silver — the Flash Crash”So this is how it ends!
If the markets weren't that cooked and would stop ``halting`` every single time the free market tries to make a come back it would have been over a long time ago.
I can't wait until the wheels come off.
Wait.......
Do these count as wheels, http://www.google.com/imgres?imgurl=http://www.inautonews.com/wp-content..., 'cause that's about what these markets look like.
LOL! A big one just flew by your head cog!
Look out!!
Time to look for some bond shorts eh?
Will the old TBT dog see it's day??
We shall see.
It will get REAL when they match US action today. Nikkei down and JGBs down (yields up) for a super whacky change up. And then the margin calls will get ripping and EVERYTHING will go whoosh! Time to be very fleet.
Safer to short non-gov. bonds. They will rise with the interest rate environment but are less likely to be monetized. Junk bonds will be destroyed when this breaks loose.
They're ALL junk bonds.
.gov bonds are backed by war.
At least UST's are backed by nuclear weapons and the most powerful military machine in the world. You can't say that for JGB's.
Ungh! Ungh!
When the yield on your 10yr note goes up by ~2.5x in 2 months, that is a problem! Especially if your already spending 25% of revenues just servicing your current debt.
someone is selling at a loss and it damn sure isn't the boj
Kyle Bass said a 2% move will blow them up. They're halfway there.
I remember when Apple kept going up in parabolic form and it kept stopping out because the moves up were too big.
Here we go bitches.
you can only play if you buy. sellers need not apply.
Admiral Josh Painter: This business will get out of control. It will get out of control and we'll be lucky to live through it.
http://www.youtube.com/watch?v=Emdzsz_XvfA
The 2 biggest sov debt markets are starting to melt down simultaneously. JGB's & UST. 10Y UST down in overnight trading too. Do the central banks of the 2 largest sov debt markets lose control at the same time? Why not?
http://www.cmegroup.com/trading/interest-rates/us-treasury/10-year-us-tr...
Abe should learn to speak from both sides of his mouth like Bernanke. Then he will have the best of both worlds like Bernanke - a well behaved bond market and a surging stock market.
Praying that they make it through the other side of this madness without a major war or a new NWO-approved third world immigration policy.
At least they don't have porous borders or diversity problems to worry about. Just China...
Britain didn't have porous borders either, and look what happened to them. A third world piece of excrement just cut off a British soldier's head on a London street while a bunch of British faggots sit around in cafes patting themselves on the back for their 'tolerance.'
TPTB and their Korean chumps are already playing the "comfort women" fairy tale against Japan as hard as they can. "Comfort women" has become to Japan what "the Holocaust®" is to Germany: a never-ending excuse to demand monetary reparations and political conciliations.
Remind me of how many tens of thousands we killed in Iraq?
Remind me of how many innocent people we kill on a WEEKLY basis with drones?
Eye for an eye, tooth for a tooth... just like that 'piece of shit' said on the video.
So FUCK YOU mate.
Speak for yourself, "we" no longer have control over "our" government at this point.
Remind me of how many tens of thousands Baath party members & terrorists killed in Iraq?
There, fixed it for you chump.
lol. We have immigration policy and we'll soon have war.
I'm as selfish as the next guy. I've got an 11 yo son I don't want anywhere near a miliatary. The sooner the better and the pace is quickening.
What was that term with Greece back in the good old days? "geo strategic risk"? a country goes broke slowly...then all at once.
So is this good for Kyle Bass?
So what happens when they halt trading everday, then every hour, and then halt it altogether?
Perfectly efficient market?
BOP I have seen this playbook before and the next thing that happens is the press conference where they blame an illness.
http://www.youtube.com/watch?v=2sVdXg0aYYw
If that fails then they blame the market glitches on this guy.
http://www.youtube.com/watch?v=DItgw1mU9Us
Only finally, when that fails, can we find out the truth.
http://www.youtube.com/watch?v=Bbv5B71KmkA
How can it be called a market when "undesired" trading is halted?
Halt trading? What happened to free and open markets? What happened to price discovery? Oh, that is on the way up, any downward pressure and it is "HALT TRADING". What a fucking joke, no, this ain't capitalism, it is rigged markets. Every market now is rigged.
Even the ammunition market is rigged by massive government purchases of same (for good reason given the rigging of all other markets, presumably)
Yep, they are hell bent on gold manipulation and driving it down so it can't compete with fiat as a form of wealth store for average people. They are trying to kill Bitcoin because it ain't banker fiat. Where is the free market?
How in hell can anyone call this shit free markets. I laugh my ass off when someone calls the US economy capitalist.
It changes when the miners decide to exchange only based on innate demand/cost, that is the nationalization play.
If metals refuse to grind their workers harder, and the earth(local communities (pollution)) in extension, then industry either collapses, or is forcibly nationalized; without of course, the people that actually know how to run things.
Price manipulation will result in a "brain drain" no matter how many immigrants they import.
Cue the sadists.
Dishonor!
Wonder what the Bernank will do with this.
I imagine his deodorant is working overtime tonight!
No worries about the losses when rates rise as mark to market accounting will be "suspended" and replaced with "I'm going to hold this debt until maturity so market losses are irrelevant bullshit accounting". Worked in the US when the banks simply did not acknowledge any losses (and still use this hybrid accounting method). The government's will allow the banks the leeway to use just about whatever accounting method they want and in fact, the banks may find a way to actually increase asset values (as somewhere in their books, derivatives will be repriced higher by some magical accounting method). That's the real issue with the banks as gains are realized when needed but losses are justified as "temporary market conditions" and investments are left on the books at cost. I don't believe anyone, anywhere has any idea of the magnitude of this problem but why worry as the banksters will be given freedom to cook their books whenever and wherever needed.
Since Japanese citizens own a large portion of the national debt, they are taking quite the pounding to their net worth.
Could be the equivilant of our housing crash, except with far wrose consequences in Japan as they have no counter move.
I wonder what the 2nd largest world economy falling into a deep uncontrollable depression will do to the global economy.
That seems like an impossibility to me.
I'm practically certain that Bernanke and company are gearing to bail them out as you read this.
What other option does he have?
i hope it fucks the "global" economy fair and square.
Grab your ankles Depend wearing Japanese senior citizens, Abe is going in dry.
In Japan it's an honor to be @## F##ked through your Wallet by your leaders.
What were you looking to say? Assfucked? While ZH has a new political correctness policy to ensure that no protected social grouping is offended by the posts contained herein, profanity is still acceptable.
Hory clap!
The most interesting part of this is the selloffs in UST's that follow the selloff in the JGB's. Fuck you Bernanke and your bullshit fuckin windown. You are going to have to print 200 billion next month at this rate.
You made you bed you dumb piece of shit monster, now we all are going to lay in it.
I guaranfuckingtee he is out of here with a pulled hamstring within two weeks of they don't find a way to put this shit back in the elephants ass.
Is this the Full Retard moment we've all been waiting for?
Cue the deer in headlights pic Tyler.
BOP I still don't think so. I think this thing goes in fits and starts. Believe it or not you could see money flying out of those Japanese bond markets straight into the U.S stock market in the short term. If the U.S 10yr gets pushed up high enough I think money may go flying in there as well.
Can the U.S avoid a direct hit if Japan hits the windshield? I guess we are going to find out.
dup sorry
This is bearish for gold short term
and the most bullish thing in history after that.
it's such crap. Who cares about the relative ratio between fiat toilet paper currencies? What if both in the same proportion printed quadrillions of their currency, but the ratio stayed at USDJPY 1.03 Would that also be bearish for gold? Compare currencies relative to their purchasing power in real things, because they all are getting blowtorched.
Excellent, well put. I was trying to convey something similar earlier to #James_Cole but his perspective is a little bit...shall we say, small?
James Cole is a reference to the movie "twelve monkeys", if you haven't seen it then perhaps you are missing the cognitive dissonance (not the poster) angle, or maybe i just think he's too clever and picked a handle that suits my biases.
James Cole is chosen from a subterranean slave population to determine the causes of the complete collapse of life on the face of the earth, he is escorted through time and eventually (unknowingly) sets off events which hasten the eventual collapse (through the incompetence of those sending him through times inability to accurately pinpoint locations(temporal or otherwise)), once he arrives at his intended destination he continues his involvement with a psychologist who had convinced him previously that he was insane, at this point he emphatically agrees with her even as it becomes apparent to her(and everyone) that he was in fact telling the truth, but do to his conditioning he continues to espouse his disbelief even as the reality he once heralded crumbles around him.
Watch the movie i guess (don't pay money) it's got brad pit in it.
Yeah I've seen it, name didn't jog my memory at first but thanks to you its back.
I agree, decent movie - I actually like a lot of Gilliam's stuff, though it does miss "something, Pitt is interesting in that one too.
So, its an artfully chosen troll name? I don't get it, a GUS troll would never have that kind of creativity would it?
You've piqued my curiosity.
Actually in the end it will be neither. If you believe Dr. Antal E. Fekete
The price of gold is headed for extinction. I for one don't believe that the price of gold is headed for five digits. Long before that might happen, permanent backwardation* would shut down the gold futures markets. Gold could no longer be purchased at any price. Gold would only be available through barter. World trade is facing an avalanche-like transformation flattening out monetary economy into barter economy. Practically all economists, financial writers and market analysts have missed this possible scenario. They don't see the greatest economic contraction ever staring them in the face. They don't see the coming tsunami of unemployment. Very few see deflation as indicated by the progressive disappearance of cash gold. It never occurred to Bernanke that the new Federal Reserve notes he is printing galore could also go to purchase physical gold, causing the gold basis to shrink. Once the gold basis* goes permanently negative, the total U.S. debt, all $16 trillion of it, will not be worth one ounce of gold. That will pull the rug from underneath the international monetary system. Barter is the ultimate in deflation, and that is what the world economy is getting.
I respect Fekete's work but can you imagine what the world will look like if his scenario plays out?
That is Mad Max times a hundred.
What did you expect when the world starts to burn? Too much complexity to unwind in any sort of orderly fashion...
And he is spot on. Price targets are constructs of the current paradigm.
New paradigm approaches...
if gold goes south (to zero), then we go north (to barter).
I'm going long scuba gear.
I hear there's a lot of gold sitting at the bottom of many bodies of water.
Piss-poor boating practices, to be sure.
This is bearish for gold short term
MarketWatch has gone full retard on that one:
Gold will not make a comebackGold has been beaten down hard after soaring to over $1,900 an ounce, and some investors think that the time has come to get back into the metal. However, there are simply too many negatives to see much upside here.
Don't be fooled: Gold is no currencyGold will not make a comeback.
Gold bugs have been spinning yarns about how gold has become a de facto currency, writes Michael Casey. But those stories haven't held up.
Don't be fooled: Gold is no currency.
I don't stack because of what gold is worth. I stack because it's never been worthless.
That is a full retard statement from market watch. I happen to be short term bearish on gold as well, but to say gold is not going to make a comeback at some point is pure hubris. And it smacks of desperation and an eagerness to sell a big lie. Makes you wonder what their real position is; are they buying with both fists?
A real bear has no need for the big lie. The facts are enough to validate short term bearishness. A glance at the price charts for the last two months is a start. So why lie?
......NIKKEI loves inflation and the demise of the Japanese culture +1.49% and may break above 16,000
oooops, the retracement was amazing! The correlation was symmetrical beauty.
Can we just start this party already? I'm tired of this waiting....
Looks like JGB's just 're-re-opened'......5yr up9%...10 yr up 9 1/2%......feedback loop 5...4...3...2...! How are THEY going to explain the COMPLETE COLLAPSE of ALL Major Economies....in days when it goes.....when everything is just FINE according to dead man walking Bernanke??? Many/Most will be introduced to the "ULTIMATE REALITY SHOW" soon....and it is Zero Sum and WE ALL are 'players'!! Should have let the market CLEAR in 2008!!
Same place that invented the Kamakazi?
http://www.youtube.com/watch?v=GNYGJyw5FoA
There is no better way to watch the collapse of the Japanese bond market than having a good stuff drink, cleaning my AR and hanging out on the Hedge.
What are you going to drink tomorrow night when the treasury market collapses?
Do you think Kito is on Ammex right now?
I'm drinking Guinness with shots of Crown. I don't know about Kito ... He actually believes that there will be silver and gold to get when the paper price gets smashed.
I'll drink Irish car bombs in hopes of many of them being detonated in banksters' pimpmobiles.
The Tylers are too modest! This post should be renamed "It's official! JGB Futures are collapsing, Yields rising fast."
This is the end. The end my friend.
Bonds crater, stocks crack up, monetization increases.
Fear of monetization leads to dumping of more bonds.
Self re-enforcing feedback loop.
World markets to Ben: CHECKMATE .
I'll take Epic Financial Collapses for $1,000, Alex.
Don't underestimate the power of dumb money investors extending this ponzi for a long long time. The US could easilly have 15-20 years of kick the can before the day of reckoning arrives. If japan has showed us anything, it is that the size of debt does not matter if investors have faith. It is losing faith that keeps these central planners up at night.
Possible. But not likely. Too much hot money looking for a trend. When the scales fall gold goes infinite bid, no ask.
Yes. The US (Bernank) will b Putin' all 85 B towards the purchase of yen, so as to support it. watch OUR stock market decline first as that POMO fails to arrive in equities. China will be forced, in turn, to buy the UST.
This will go on for a while. Japan ( and the US) are hoping for some new Kondratiev wave to lift all boats, and it best be a tsunami.
Will it arrive before the us taxpayer goes civil war on their ass?
And I'd argue that the investors have lost faith. Not the monied players, but much more importantly the vast number of participants in the game. Kinda like a quickly diminishing WSOP. Well, maybe there is a bottleneck (on geopolitical/fiscal time scales) where players are buckling down and being conservative, but once that dam is broken those remaining start dropping like flies, while the leaders eat up their stacks.
Except in this Series, those few players have the secret table level cameras on every player, every hand - they cannot lose, except when it is beneficial to them to do so.
Well, even then they would eventually run out of suckers to swindle and have to confront each other in a real way.
Don't overestimate the ability of a complex system to act in increasing coordination amidst decreasing stability.
There isn`t 15 or 20 years of good will left in the US. Perhaps 3 or 4 more years... at the extreme.
No this isn't the end yet. When the end comes you will see asset classes vaporize as all the markets go bid less We are very close though, they still have a couple tricks up their sleeve, like bank holidays and seizing assets. If you're in the system you better get the hell out. .
China is playing the Japanese. See if they get yields back to 2011 levels. Drive up rates and make BoJ and Abe look like f*cking clowns. Next Japan stocks ala:
*foreign investors bought net Y716.0 bln Japan stks
As a stock crash is looming, Japan will be short on all fronts cept JPY.
Japan is under economic attack from within and outside.
Tasty.
what do we do chump?
Bust out the popcorn and study the subtle:
http://en.wikipedia.org/wiki/Thirty-Six_Stratagems#Thirty-Six_Stratagems
It was comical that Abe seriously thought he could mess with China and the rest of Asia. Japanese banks will be in trouble once yields blow out further, if stocks are hit next, there goes the pension funds (Japanese citizens savings). For us, we will have to see. The bluntness of money printing could support ranges. I don't know, we could be next. 30yr mortgage rate is up, 10yr UST is up, USD is bid = liquidity tightening/rates etc.
QE has failed sans Wall Street cronies cashing in.
all i care about is the end of july as my home closes and i am free to roam about...
China has used the N. Korean puppet well also, probably in exchange for some colored beads and fire water.
Start looking for capitulation top in NKY:
http://www.bloomberg.com/quote/NKY:IND
They will buy the socks until the very end.
down draft days a comin - been ther don that. nice to be permanently (self banned) sidelined.
much better view, i do say...
Like clockwork, Nikkei just got slammed.
Who remembers this: "Please do not worry."
anybody thinking ben to put a bid under this mess in japan?
As long as it's not
“We were seeing things that were 25-standard deviation moves, several days in a row,” said David Viniar (Goldman Sachs CFO, on August 13, 2007)
I'd say everything is peachy.
When Japan blows we can see a preview of the US.
Keep printing Abe up until you go off the cliff.
Shorting the yen is making me a shitload of money...
Japan is fucked as a society for at least the next 20 years... if not 100.
Is Fukushima fixed?
No way! That'll take at least fifty years, if not much longer ...
NKY has reversed and gone down on the day from up 2%....could be from the Chinese PMI data, not sure. Either way volatility is increasing in equities too.
http://www.investing.com/indices/japan-ni225
I'm seeing some wild movements in nikkei 225--over the last 20 minutes it's gone red and then green at least twice
NKY gettin monkey hammered now. Down over 800 points from top. Free fall
http://www.investing.com/markets/asia-pacific
......Down goes Nikkei....Down goes Nikkei.....DOWN 240 to DOWN 490 in seconds.....will BOJ intervene? or is this wanted outcome to tame the 'market that is NOT in a bubble'?
DOWN 650 now!!! :O
Nikkei is down 570 points!
http://e.nikkei.com/e/fr/marketlive.aspx
this chick has an excellent grasp of the jap situation
Meet Christine Hughes
http://chartistfriendfrompittsburgh.blogspot.com/2013/05/meet-christine-...
Nikkei halted now.
Japan is dead in the water.
Oh its just the Japanese bond market !
I thought it said the James Bond market...I almost had a heart attack there
Did you know that darn Nikkei goes down faster than it went up. At this rate by the end of the week it will be lower than before the Central Banksters wisdom was bestowed upon it.