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China Repo Spikes Most In 5-Month Highs; Japanese Stocks Soar As TEPCO Finds Another Leak
While the Dow has quietly added over 200 points in the last 2 days, the potential for Kuroda and Abe to embark on QQQE has sent Japan's Nikkei 225 up a magnificently suitable (given the utterly dismal macro data from yesterday) 700 points in the same period. Somehow this jerk higher to near the big collapse-day highs in May makes sense to someone (as TEPCO announces yet another leak). Meanwhile, across the sea, Chinese money-markets are exploding. The last 2 days have seen a combination of no operations yesterday and a big lift in rates today which spiked overnight repo-rates to 5.32% - the highest in 5 months if it closed there - as clearly smaller banks are desperate for liquidity. FX markets are seeing weakness continue in Indonesia, Thailand, and the Philippines. So, all-in-all, total chaos...
TEPCO first - because that is just a fucking shambles:
- *TEPCO FINDS NEW LEAK FROM FUKUSHIMA FLANGE-TYPE TANK: KYODO
- *TEPCO SAYS TANK WATER LEAK ABOUT A DROP IN 4 SECONDS
- *TEPCO PLANS TO PAY PART OF DECONTAMINATION COSTS, KYODO REPORTS
But Japanese stocks are soaring... makes perfect sense after last night's total #fail for Abenomics... USDJPY is back over 100... so that must be good (Venezuela here we come)...
as The NKY plays catch-up to The Dow once again...
And while the world is awash in liquidity, the locals in China are getting restless - as overnight repo sees the bigggest 2-day spike in 5 months on the back of a non-reverse-repo day and modest tightening by the PBOC on its rates...
From MNI,
China's benchmark seven-day bond repurchase agreement opened at 5.2 percent on Friday morning, up nearly a full percentage point from its closing quote of 4.3 percent Thursday, after the central bank drained liquidity from the markets for the week.
High opening quotes are not always indicative of wider market sentiment, as traders say some smaller banks occasionally find themselves desperate for cash, producing outlier quotes. But the second quote also came in at 5.2 percent, which might suggest a wider trend.
Charts: Bloomberg
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FUKUSHIMA means take it from behind in Japanese
A new leak? Burrish!
1-800-Fuc-kYo kushima. Gotta love the symmetry. Like the pyramid on the dollar bill, for example. This note is legal tender for all debts, public and private. We also accept checks. Please make payable to Rothschild Loving Trust, LLC.
No, no - shima means "island" - so Fuk-u-shima means to fuck up your island.
It's only a little leak.
Those Japanese sure know how to throw a party. What have they got to lose that wasn't already lost 20 years ago?
ZH articles can literally move markets. 2 days ago we get this "In short: as a result of its decision to double the monetary base, Japan delayed the inevitable thanks to the distraction of a surging stock market, but now that the surge is over, attention has returned to the flaming wreck that is Japan's economy".
....and two days later the Nikkei is working on a thousand point move. I am not trying to break balls here. It's just fascinating how this stuff turns out.
Hey Fonz,
Something you mentioned has stuck in my melon. You mentioned that even if one shorted the market...and was right so to speak...the probably of being paid out would be nill..assuming the market tanked on a grand scale. I think you were on to something there.
That was some good advice.
Sticking with FX. None of this shit makes any sense anymore.
However, my scotch tastes better everyday!
Doc Engali has been saying it as long, if not longer than I have man. It's too late to go back to what used to be a market. If Japan for instance went down we would see a domino effect that would take down the whole global financial system. That is why Japan can sit there with 300% debt to GDP and 10yr JGB's breaking towards .5% while the market, which would have sniffed it out and destroyed it in the past, looks the other way now.
Lehman and Bear sterns were dragged out in front of the rest of market and the rest of the market watched them endure this...
http://www.youtube.com/watch?v=W1skaCKoWJA&oref=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DW1skaCKoWJA&has_verified=1
and that was that. Everyone got the mesage. We are all roped together now. So yeah I think it is useless to short. Just go for the ride or find something else to play with. Good luck with FX man. Go get em. Enjoy the scotch man.
Indeed,
I enjoyed reading your posts along with Doc and Dime. All we can do is play the market as is...and stop yearning for the good ole days when things were less rigged.
I hope you, Dime and Doc make a bundle and hold on to those gains...through any manner possible. When this shit drops... God knows when...it will not matter who was long or short equity markets.
Good luck, Amigo!
That is why Japan can sit there with 300% debt to GDP
Umm , I always wondered about that. What do you brave FX gentlemen say about FXing Bitcoin?
Funny thing about shorting a market. You have to hope for a slow decay and rebuy every day (the action of inverse ETFs) or your maximum return is 100%. If I short TSLA at 20 and it goes to 0...I only profit 20. If buy TSLA at 20 and just wait around...chances are its going to go above 40. It doesn't matter what the market conditions are or what sort of market it is - shorting is for the short-term. The idea is that a short may pay off faster than a long position...but in reality, the only way a short is a long-term investment is if the company goes to 0. Good luck.
Madness.
Soaring because the BoJ is about to buy up the JGBs Friday auction (5yr). China is a mess. Japan is suicidal = war.
This desperate insane commie move will be mirrored by Yelland in coming months.
Prepare.
Chump if we follow Japan it seems like the only things to prepare for is the 10yr sub 1% and the S&P to blast through 3,000...and I'm not even kidding. I truly don't see what is going to make this market turn and devour itself.
The REAL surprise Fonz:....the 10yr blowing through 3...4....5% and the S&P rocketing toward 2000!!!!
THIS IS THE LAST AND FINAL BUBBLE!
It's not a surprise, Einhorn predicted it a few years ago.
"If the Fed's hope is to drive investors into equities, propping up the bond market is counter-productive. While there are many parts of the cycle where higher bond prices fuel higher stock prices, at this point in the cycle the relationship has reversed. In recent months, stocks and bonds have developed a strong negative correlation -- what is bad for bonds, is good for stocks. The Fed does not understand investor psychology: If you want to get people to sell bonds and buy stocks, the best way to do that is to show them that bond prices can, and do, fall."
http://www.huffingtonpost.com/david-einhorn/fed-interest-rates_b_1472509.html
Don't cite huffington post...that's just sad.
As bond prices fall, is that not incentive for many to invest in 'guaranteed' returns and leave their money in savings accounts which pay yield based on bond yields? I guess you could assume those who tolerate no risk are leaving their money in savings accounts currently anyway. But meh...hard to tell until the 10 yr yield is 5%.
Give me a break with the huffpo. It was an article by Einhorn. I don't care if he wrore it in "who gives a shit" magazine
and sure i think as rates do rise it entices some people to eventually dip in and buy some bonds. But it can get dicey. If rates get above a certain level the risk is the whole thing can spiral out of control. So they have to rattle bond holders just enough to make them want an alternative but not enough to break the market. so far they are pulling it off quite well.
Being the reserve currency of the world I don't believe we can follow Japan. The amount of debt the the world would need to absorb to support the U.S. dwarfs the Japanese debt market.and we haven't even started getting into the unfounded liabilities.
doc.
these markets look like they will go straight up
i've never known fundamentals to mean anything once the momentum hits the phase trans zone
yeah, it's just sheer madness but be damned careful
this can go a lot farther than it has
and all these bank research depts are always on the wrong side
i know a lot of people think that this is it, but i have not known many who could call a top or a bottom
i feel sorry for those who have been right but too early---a lot of fuel burned for nothing
It's been my belief that you BTFD and stay long the market, but it better be with money you are willing to lose. When this thing goes down there will be no escaping, because it will basically vaporize in overnight trading.
My practice has been to peel off profits and use them to buy real things, like bullets , band aids, booze, beans, and boobs. .....okay maybe not the boobs. The Mrs. would get a little miffed.
It could start here and be overnight there.
I suspect many of us are keeping a toe in the water as far as going long. For me it's mainly with mining companies and energy exploration. Nothing I would cry over if lost. And it's funny, but it is a few dollars for a propane heater, a few dollars for silver, an extra case of water in the basement, canned foods, more target practice which includes the kids........
and prayer.
Well you are right. There were huge spikes in the ES futures before the Yelland speech.
For devouring, maybe War.
@ chump666, I have visited Asia twice, bought from East Asia and always read that part of the world. But I know very little, certainly not about what goes on in their heads.... I hope you are wrong about war.
Agree re China as a mess.
Agree re Japan as essentially suicidal.
Agree QEeen Yellen.
Agree prepare.
***
Despite my agreeable-seeming comments above, I do not like what I see happening almost worldwide.
this time around they nuked themselves...
Abenomics has/is FAILING!
The only thing left to do is.....take NIKKEI to the FUCKING MOON!!!
I believe this is the outcome we will see/ are seeing in the US.....the end will be near when DOW, S&P, Nasqaq trends lines steepen to near vertical......It is the only option left.......blow-out the equity markets....claim victory....turn your head....plug your nose...bend over....and blame EVERYTHING except the Western Capital Model and the Fed!!!
When you FUCK the Status Quo.....the Status Quo will fuck you!!!...I'll have a White Russian!
"I'll have a White Russian!"
It's called a Caucasian
Long diaper changing robots!
Hey buddy can you spare a few billion renminbi ?
Absolute insanity ! When all these faux markets crash there'll be blood! Mark my word!
Fuck off.
Nice of TEPCO to offer to clean up the mess it created. Please curb your dog, sometimes.
A drop in 4 seconds. Does that mean the tank is almost empty?
When dealing with TEPCO....You MUST ALWAYS make the TEPCO conversion....similar to converting to metrics!
for volume(V):
1 TEPCO drop= 10 U.S. Gallons
4 TEPCO seconds= 1/1000th of a normal second
You do the the math!!:)
Thank you for giving me nightmares for the rest of the week. Yourtheman.
The Chinese are buying lots of BitCoin (more than all the other countries put together so it looks from fiatleak) for some reason or another. Would like to see an acceleration graph for Chinese purchases of BitCoin.
Ah, those wily Chinese. They're buying lots of gold too. And oil, trees, gas, Smithfield Foods.
I bet they're paying for those bitcoin in US$. Soon they won't have any US$.
Stack On
Sorry to be so dense but, could someone explain the repo thing to me again. I don't know how to interpret this and it seems lke a big move. Repo is where they buy back their bonds to incrrease cash in circulation. If rates go up on the repo, is this interest paid to gov, did the value of the bond fall? Arg.
Repo rate going up means a bond holder (typically a bank) must pay more interest for cash borrowing collateralized by their bond portforlio. Higher repo rate = cash holders sees more risk in lending, or simply has less available cash for lending.
Nuclear Engineer: Borated rubber between fuel is damaged in Unit 4 pool; Increased risk of criticality — The Economist: Rods can explode if they collide — Tepco VP: Recriticality ‘highly improbable’
http://enenews.com/nuclear-engineer-borated-rubber-between-fuel-is-damag...
Damaged fuel rods are cracked and leaking radioactive gases in Fukushima Unit 4 pool; Wire appears trapped in racks — Another assembly bent when “mishandled during a transfer”
http://enenews.com/damaged-fuel-rods-are-cracked-and-leaking-radioactive...
Over.
So I take it that they have started the repairs. I mean, can't have guys sitting around when they're getting and extra $200 a day.
TEPCO will remain in charge and NIKKEI will got through the stratosphere. It all makes CENTS now.
People in the west seem to forget that 5-6 percent used to be the floor for interest rates in WESTERN ECONOMIES. Countries that grow faster would tend to have it in 10-12 percent range. The fact that overnight rate in China is 4.5% is a fucking miracle of central banking!
How this isn't run away inflation is beyond me.. Truck parts are nearly double what they were last year..