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UBS CIO Warns Of Japanese "Abegeddon" Scenario
Last night's over-promised and under-delivered 'third arrow' from Abe appears to have solidified market opinions about the chances of Abe slaying his deflation-monster nemesis. UBS' CIO Alex Friedman fears that Japan may face a fearsome stagflation - where accelerating inflation in asset prices is not met by higher growth rates - a scenario he calls "Abegeddon." In an "Abegeddon" scenario, Friedman said "investors may grow increasingly concerned about the sustainability of Japanese debt levels that could lead to a 'stampede' out of government bonds." With Nikkei 225 futures having faded their European morning bounce and pressuring back towards the 20% 'bear market' correction levels once again, it seems the 'stampede' is out of growth-expectation-driven equities as JGBs are bid for now. That bid (no matter how hard the BoJ tries) is unlikely to last if the doubt grows as Japan's debt-to-GDP would rise above 300% (from 226% currently) and the 10Y JGB yield could approach 5%!
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Hey dickwad when do we become increasingly nervous about UBS?
Other tbtfb's are going to get into trouble first.
Don't you understand what's going on now? Liberty Street is now going to drive stocks down so as to get the yields on treasuries back down. Get a clue; better be short for the next 3 months!!
Liberty Street turns in to Maiden Lane. Something tells me Maiden Lane will have a hand in this mess.
Watanabegeddon and massive carry unwind that will make 2008 subprime crisis look like a walk in the park.
A disturbance in the farce. A whole bunch of yen will suddenly cry out and cease to exist when all those shorts decide to cover.
Dimon, go to 5:40:
http://www.youtube.com/watch?feature=player_embedded&v=iR-gJ5N014o#!
Translation: JP Morgan is basically rooting for BK's so they can swoop in and grab up assets at cut rate prices. In the absence of organic growth, smash and grab.
Now are you saying that because it's a swiss bank and there is some sort of loyalty there? I can't handicap it so you may be right. My theory is you take down one TBTF, and I include UBS in there, and you take down the whole banking system. So in reality it could have been any TBTF CIO up there and I would have made the same comment.
No really no loyalty issue. They destroyed the culture of Swiss banking together with CS. Nobody in their right mind should feel loyalty towards them.
It's just that they have been downsizing the IB massively and built up capital since 2009. They're way better postioned than the Southern European banks and than the UK banks, too. UBS and CS aren't such massive players in derivates like the US tbtfb either. Switzerland is also fiscally very stong, so another round of bailouts in the multi-billion range is absolutely payable.
So all I'm saying is that UBS and CS are most likely not going to be the trigger for the next crisis and that they'll be pretty resilient. A systemic collapse is going to take them down anyways...
UBS will be just fine until the housing bubble in Switzerland pops...
And I agree with you that our next black swan won't fly out of Zürich, as Swiss banks probably have the best collateral out there.
DOW 14K??
BEN??
WTF???
You deserve a green just for the use of the word "dickwad". Dickwad is a classic word that is used far too infrequently. I just wish you had been able to add in the word "bitchez".
UBS is good. The ECB will do their stress test and give them a 9 Unicorns rating.
EU Stress Test: What a magnifique repast! Mon cherie, why don't you put zees on your credit card and I shall approve eet. We shall do zees every day! Viola toot sweet!
Personally I prefer "dickweed"; reminds me of my youth.
Looks like Kyle Bass is "game, set, and match" with the land of the rising sun.
Abe should hire Hayman as independent economic advisor at this point.
A Flashback to 8/2012 and Kyle Bass' "widow-maker" on short JGB
A Tax Revolt in Japan, and a Bond Bubble Toohttp://www.businessweek.com/articles/2012-08-09/a-tax-revolt-in-japan-an...
LOL
Haven't heard dickwad used in a long time.
i thought it was recently upgraded to...digital dickweed.....
moar......dickwad......bitchez.......
+1
Bondpocalypse, bitches.
JGBs
Movin movin movin.
Keep them doggies rollin.
Head em up Ride em in.
Head em in Ride em out
Next verse -- the REITs
Movin movin movin...
And Alex Freidman the eugenicist from the Bill and Malinda Gates Foundation. Now there's someone you wouldn't want to trust around your dog.
Hey UBS' CIO Alex Friedman. You have an incredible grasp of the obvious.
Good job.
Now here's your $5M paycheck.
A year of hyperinlation will reflate the ship.
A year of hyper stagflation will sink the ship.... You can only have inflation when wages rise, unless you are a givermint employee that aint happening.
Right, can't have inflation, no one can afford it without rising wages and that's not happening, the reverse is.
UBS didn't want to offer Japanese CDS's to somebody I know even three years ago. They were aware of the risks long ago.
Alex is that you?
No.
Didn't UBS buy all the toxic WS mortgage crap?
weird board today... Oil up, US bonds prices up but not as much as they should be. Europe hammered, and dollar down..... Gold a small bump
With whats happening in the world today one would have expected Oil down, bonds massive up (on foreign buying), and dollar up... Gold up huge....
market forces will win - eventually...
Can you stay solvent in the meantime?
solvent was gone along time ago.... working on staying moderately sane....
The odds are you guys are right and "market forces" mean rates have to go down. There may come a time when the banks have positioned themselves net short treasuries and net long gold and the light the match that burns thehouse down. I'm not saying we are there yet.
Doh!
The 2.25 down to 1.65 trade on the ten year is looking pretty good right now.
I still see 2.10%. i am hangin until we go below 2.05%. then I give.
Problem will be setting the stops on it.... Tomorrow it should rip right back to 2.13 / 2.14 on the massive POMO. Fridays crappy jobs report might very well be taken as bullish... Probably will need to set a 10 percent stop on a bond trade if want to catch the general trend and not get whipsawed....
Still puzzled by Mortgages not moving...
Eventually, it will all be vaporized when the sun goes supernova.
Traps being set for jobs report.
JGBs are not going to collapse.
Why? Because Japan can play the Mutually Assured Destruction card.
"Look, Ben, Mario, nice world you guys have out there. Be a shame if anything happened to it. Imagine what would happen if we looked around at all of our bonds and found the ones that had the most swap exposure -- and then said . . . guys, we default on those. What a shame that all those derivatives blow up. Of course, you can prevent that. Buy those bonds. Heavily. Have a nice day."
I think it's time to throw in the (Spiderman) towel....
What a fucker of course there isn't going to be any real growth.Any gains the exporters get through devaluing the Yen they lose in resource cost. You can't have that much freaking debt and expect to grow your way out of the mess. Default and reset is the only solution.
Bingo! +10.
You're almost dead on correct, Doc.
There is, however, a logistics and sequence issue.
Ya, oil will smash them as they weaken the yen, but Toyota will also smash GM. Who would buy anything other than Toyotas if their prices dropped by 50%?
No way in hell Obama allows his showcase auto union gem to disintegrate. The Yen will be bought. A lot of it. Ben would intervene.
Don't confuse (fall for) 'pretext' with 'motive'.
The real motive for the synchronized debuchery of Western currencies, is to play Currency Wars with Russia and China. When you're doing ongoing QE, you're exporting inflation to countries outside Club Fed and its synchronized swimming team. Here are the swim moves:
QE --> exporting inflation/monetary problems --> economic problems --> political problems*
All of which the NWO elite 'paid' to see.
* Check with Jim Rickards. Or with Tyler. I double-dare you. :-) And watch Mike Snyder jump on this, and write an article (making the idea all his own) in the next few days ;-)
In the time of the Shogun (1637), in what was a small town called Shimabara, a peasant revolt started because the farmers worked only for their lords, not to keep the fruits of their own labor for themselves and their families, and were near starvation from taxation (payment was in rice mainly).
To make a long story short the revolt lasted 4 months then 40,000 Japanese peasants were slaughtered.
The Feudal System died hard, it took generation after generation of resistance and battle to end it. Britian imposed this system on Ireland and centuries of poverty and suffering and revolt tore that nation to shreds, but the elites lived like gods. Our world is fast spinning back into a neo-feudal system. Some say this is only the market working it's magic. I say Bull Shit! A real market system strangles monopoly and feudal systems, but our modern one rewards both.
Do not buy into the theory that today's 1% are all up there because of merit. Some are, most are now feasting off of a corrupt crony capitalism. It is morphing into a soon to arrive new feudal era. The corporate media is telling you lies. You do NOT live in a market system, you live in a corporate system that has captured government. Show me your free market, it is there, but only for labor and the small people, the rest are living the dream protected by the corporate control of government.
But that's okay, America is about to conquer Syria, a great victory, soon Iran will fall to our legions, and America will celebrate! Wake the Fuck Up! Are Syrians, and Iranians your enemies? NO, but corporate AMerica is having trouble penetrating their political systems, so they must fall. Russia is at the top of the list. But Putin has nukes, and S-400's. Lets see NATO bomb Russia, Ha! Ha! Ha! Good luck.
BINGO JACK, +100
Read through “Towards a World War III Scenario: The Dangers of Nuclear War“ by Prof. Michel Chossudovsky, "a book that cuts through the chaos and deception to show the reader exactly how and why humanity is facing an existential threat. It is a wake-up call that the world is being pushed towards catastrophic conflict." SYRIA is one of the targets to take over (in near future), with the next one is IRAN!!!
This book shows that, incredibly, the same deception that the Western governments and media perpetrated to facilitate the war on Iraq less than a decade ago is now being repeated with Iran. But the real threat to world peace and the future of humanity is not Iran and its non-existent nuclear weapons program – it is the US-led alliance of NATO powers and their Middle East partners, Israel, Turkey and the handful of Gulf Arab monarchs.
The real agenda behind the drive for war is imperialist control of natural resources in a region that possesses some 60 per cent of all known reserves of oil and gas – the lifeblood of the capitalist global economy. Cloaked with the fictitious cover of “war on terror”, “international security” and “humanitarian intervention”, realities are being turned upside down.
The agenda for global control of resources is a long-term dynamic that Washington and its NATO allies have had on the drawing board for decades. The nine-year war on Iraq is but one episode of this unfolding scheme of conquest. The NATO-orchestrated regime change in Libya is also part of this military roadmap, which now has Iran in its sights. But this war lust will not stop with Iran. It is about global conquest by Western powers in which ultimately China and Russia are also marked out as future enemies.
Disturbingly, the US-led agenda of permanent war has incorporated the doctrine of pre-emptive strikes with all military options, including the deployment of tactical nuclear weapons and a new generation of so-called monster bombs. The imminent military showdown in the Persian Gulf could turn out to be not just a regional explosion of latent conflicts – it may be the trigger for a conflagration between global powers armed with nuclear arsenals capable of unleashing destruction that puts the very future of the planet in the balance.
The Western public has a vital task in preventing their governments’ drive for war. Michel Chossudovsky’s book is an essential tool in equipping the public for that task by showing them the truth of what is at stake.
http://www.globalresearch.ca/towards-a-world-war-iii-scenario-the-real-i...
"10Y JGB yield could approach 5%"
how could that be when a corporate bonds from fly-by-night companies are trading below 5%?
Japan should apply to get a bailout from the FED. Hell what's an extra Trillion or two to Uncle Ben.
Jesus Christ! You mean the USA Fed has not started bailing out Japan yet!?! Seriously, if this gets out of control, the Fed will print a few trillion minimum to bail them out. This is WHY the dollar as world reserve currency is all powerful, YET, this is also why it will soon fall. How many world nations want to hold green toilet paper in exchange for gold, oil and manufactured goods. Smart nations are hedging their dollar reserves as fast as they can and seeking mutual trade in their own currencies with no need for any dollar conversions. China must wonder what all those vaults full of green asswipe are really going to be good for going forward.
Nobody knows what to do. All the elites have their wealth tied to paper assets. How many billionaires are only billionaires because the shares of their company are valued at $xxx. They call someone rich, but in reality the wealth is all fake. If the shares of their company go to zero, so does their wealth. Zuckerberg has no real value to anyone. He's a billionaire, yet doesn't actually have billions in cash sitting in a bank, only shares valued at billions if he sells right now.
I'd say 99% of them couldn't fix a plugged toilet, change the oil in their car, or cook something to eat. If paper assets go to zero, so does their usefulness.
If Warren Buffett's paper wealth went to zero and he came begging at my door, I'd spit in his face and tell him KFC throws out all the unsold chicken at 11:00.
Governments may be hedging against the dollar, but it won't really matter if the financial system goes down. The elites and the heads of government will be the first ones to get their heads cut off.
Correct! And when the rich try and get out of paper assets into anything of real value the market correction will be epic. I can see complete free falls in paper wealth, stopped only by market stops and Federal reserve buying. I remember the .com bubble. People at work talked of their 1/2 million dollar 401K balances, some talked of taking retirement in their late 40's early 50's! I called BS on their wealth, they got very angry at me. In the end, I was right and they were wrong. Their NASDAQ wealth went up in a puff of soke. The Big boys bailed and the average guy wailed! Such is how it always turns out. Never count your paper assets until they are cashed out, till then, they are an illusion.
Sure why not, 20 hour/week avg U.S. wage earners can pay it all back quick.
To be followed by Abenegeddon.
http://en.wikipedia.org/wiki/Chapulling
Everyday I'm Çapuling !http://youtu.be/QV0NTUY0Zls?t=4s
Here we go.....
http://www.reuters.com/article/2013/06/05/us-china-eu-solar-idUSBRE95403020130605
TRADE WARS HAVE BEGUN!
You should look into this website called ZeroHedge as they covered this already:
http://www.zerohedge.com/news/2013-06-05/trade-wars-chinese-empire-strik...
http://www.zerohedge.com/news/2013-06-04/here-come-trade-wars-europe-imp...
roger that...
#dickwad
brazil lifted tax on fixed income; sell JGB buy Brazil fix income?
So much for the third arrow.
Poor "Link": http://www.hark.com/clips/jcvkpzwlxq-link-dies
So even though a normal American doesn't give a shit about what is going on over in Tokyo, or Hamburg Germany, or Buenos Aires, it doesn't matter because the banker elite have tied us all together with their relentless search for yield. Mutually assured financial destruction.
A business with no connections to Japan can be destroyed because of a bank that bought too many Japanese stocks using the deposits of the business.
The Abegeddon or Abepocalypse can be interchanged with Benageddon.
It seems the only thing any of the bozos has been able to do is just make everything more expensive around the world, while making sure veryone other than bankers gets paid less.
WOW, and they give out Nobel Prizes to these people.
The Nobel Peace Prize really should be given out to the guy that kills the most humans. With no humans we would have absolute peace, right? Perhaps that is why it was given to Obama.
Japan's debt-to-GDP would rise above 300% (from 226% currently) and the 10Y JGB yield could approach 5%
US debt and unfunded liabilities to GDP exceed 900%. Why should US 10 year bonds not be trading at 6% or 7%?
Sorry, Duplicate - Should not be drinking so early. Damn you, Bernanke.
I worry more about a Babegeddon scenario, given the side-bar ads on ZH. Hey, wait a minute, isn't that some German pornstar... what's her name... Deuxma? Posing as an actress in the ad evidently. So they're all actresses on these "dating" sites.
Now it changed.. Ah, the electric cars look more interesting than old MILFy sluts. They get around just as much, but with a better financial yield, no doubt. And no collateral damage or bloback. ;-)
AbeGartner!!!!!!!!!
Abe does karaoke:
Ooh my little printing one, printing one.
When you gonna give me some Yen, Kuroda?
Ooh you make my motor run, my motor run.
Gun it comin' off the Toyota line Kuroda
Never gonna stop, give it up.
Such a dirty mind. Always get it up for the touch
Of the Japanese paper money.
My my my i yi woo. M M M My Kuroda...
Abe does Tom Higgins and the Don
http://25.media.tumblr.com/tumblr_m79n0fmZHI1r3lcpwo1_1280.jpg
"Indiana" Benny (what they are calling him on CNBC), can buy Japan 3 times over. If Japan cracks, the FED will be there with the caulking to fill in the holes and keep a rickety world from crashing. How will the FED ever run out of money? They can print, steal more with higher taxes, steal from $7 trillion of private retirement funds, or simply sell government assets.
Deleted
Apparently Japan didn't get the memo...
See: http://www.buoyanteconomies.com/CAD_Formula.htm
Printing money under a floating exchange rate does NOT boost exports and stimulate local businesses, quite the opposite.
Central banks love floating currencies because they can be lazy and don't have to manage foreign currency reserves by restricting domestic lending. Member banks love floating currencies because it removes oversight and allows them to self-regulate.
In reality, a floating currency simply destroys an economy as banks drown the economy in excess credit. Read Leigh. He explains it well. A simple concept that explains why Japan's current course is utterly futile and why China has a better strategy.
"We're witnessing live the death of Japan"
http://www.youtube.com/watch?v=NNZ-VJMJyqo (in french)