This Won't End Well

Tyler Durden's picture

With both the Real Estate and Banking equity indices in Japan already in bear markets (down over 20% from recent highs) and the broad indices down over 15%, just how much pain can the massive influx of foreign capital take before the exodus really takes hold. Today's 'news' of the GPIF's allocation shift won't be enough to stem the tide as 'foreigners' (who have flooded on an epic scale into Japanese stocks) step away to the next hot-money focus... this won't end well.


The Real Estate and Banking indices were the best-performing, most hot-money riddled indices and evidence that things are shifting rapidly in Japan...


and with this kind of massive flood of foreign capital into Japanese stocks, we suspect things will not get any better when this chart 'normalizes'...



Charts: Bloomberg and Barclays

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ZippyBananaPants's picture

you can blind fold them with dental floss

Randall Cabot's picture

May 30, 2013, 7:02 a.m. EDT

Ignore the news and buy Japan

"But the important point that this chart should convey is that even though it seems quite bad right now based upon the news coming out of Japan, my suggestion would be to ignore the news, and look to buy this consolidation for another rally back to the highs for a double top, and potentially even as high as the 12.65-12.95 region before wave (3) tops."     


Obchelli's picture

Yes but with headlines like this

"Weak US data run gives stocks a lift"

This can go forever since warrants data will be getting weaker and weaker hence stocks going higher and higher

what a world

slaughterer's picture

Smart money Japanese are selling to the dumb money foreigners at the top.   

LibertyForSome's picture

If only it were so easy to print support for a family of 5, then I'd never have to work.

Yen Cross's picture

     Here's the numbers from last nights report.


  • Japan Buying Foreign Bonds Y -1117.3B (prior week was Y – 800.6B, revised from Y -804.4B )
  • Japan Buying Foreign Stocks Y -104.9B (prior week was Y -136.9B)
  • Foreign Buying Japan Bonds Y -457.2B (prior week was Y 17.6B, revised from Y 17.7B)
  • Foreign Buying Japan Stocks Y 27.4B (prior week was Y 715.8B, revised from Y 716.0B)<  1/10th of prior week, reflects the Nikkei selloff.
disabledvet's picture

"churning." spreads will widen, trading strategies will become more complex as more information is gathered. At some point you'll see some frontal assaults on Japan Inc itself (the whole Sprint thing looks like a template to me.) while not exactly dismantling ala Russian style does appear to be "making way for new ownership."

q99x2's picture

I want a world that I can play with.

alien-IQ's picture

Nothing "Ends well", that's why it's called "the end".

Dr. Engali's picture

Oh I don't know about that...Thelma and Louise drove off a cliff and that ended a really painful movie I was forced to sit through and watch. That ended well.

alien-IQ's picture

I gotta admit, that's pretty hard to disagree with.

spaceduck's picture

"This won't end well", i continue to read the same words from long time.

Of course, the more time pass the worst it will end, and that's why MAYBE right now it would end soo badly that the world really cannot afford it to happen, therefore i would say:


"This won't end".

Groundhog Day's picture

Is that "oh Henry" buying them japanese equities

rubearish10's picture

"This won't end well". What has, since we've been reading this phrase? Will not admit PM's have ended well 'cause that's not over. Confidence is high on that.

So, nothing has ended badly. Nothing has ended. When will "it" end? Not in a Central Bank's lifetime, unfortunately.

rubearish10's picture

BTW, very bullish on PM's, so no down arrows on that part please.

CaptainSpaulding's picture

Its up there with " We're gonna need a bigger boat"

Zen Bernanke's picture

I'll believe it when i see it.

Dr. Engali's picture

Maybe it's not a good idea to double your monetary base and blow out your bond market after all....idiots.

LeisureSmith's picture

The pic seems to be missing from the enenews article but the linked article still have it.

Apparently MacGyver was in the neighborhood.

slimething's picture

Yeahbut, CNBC says the U.S. economy is chugging right along with the throttle wide open.

Downtoolong's picture

Even the cosmos are now sending us warnings of how QE will end it all. Still, the Muppets keep buying.

“Asteroid 1998 QE2's close encounter”

Dr. Engali's picture

Stock up on canned goods? Oh Brian you kill me. I'll be concerned when a comet comes within the moon's orbital path.  It is funny that it's called QE2. If it's followed up by a QE3 then I'll know we are in serious trouble. 

orangegeek's picture

80 percent plus of a bank's business is real estate.


US RE sales missed this morning.  This should bode well for banks.


Nothing but up.

teolawki's picture

No worries. I'm sure Tepco can fix any financial meltdown for them.

LeisureSmith's picture

Yes, pour the toxic assets into the sea of greater fools. The sea of greater fools have magical dilutive powers. Too bad the top predators in the economic world don't eat their losses or the toxic waste they create.

NipponMarketBlog's picture



Notice how the locals (individuals) have been selling into the tsunami of foreign fast money. Food for thought.

Notice also how prop books were initially front-running the inflow of foreign funds last year, only to then stay fairly constant net sellers after that. Seems even they underestimated the pace of the market's ascent.

Meat Hammer's picture

I'm starting to think that this can go on for a long, long......LONG time and I'm practically ready to tune out.

Which means it's probably going to hit the fan soon.

Dr. Engali's picture

I've had those same thoughts with the same conclusion several times over the last few years and still nothing.

fonzannoon's picture

This is 2008 all over again right now. Japan = Lehman. This time though they are more prepared. If throwing everything at Japan does not work, and it won't, screws will come flying off all over the place.

Meat Hammer's picture

Ok, Fonz, I'm saving this comment thread and if 2 years from now it hasn't happened yet you have to pay for the Asian beauty of my choice...or that Latina one, second from the left, who looks like she hasn't seen her toes since puberty.  

fonzannoon's picture

trust me MH when this thing goes it's possible you get 3 down days in a row on all the major indexes at which point you better buy that 3% correction violently.

venturen's picture