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Bank of Japan Reaction Context: Nikkei 225 Is Up 1000 Points In 7 Hours
You know the world's financial markets have become farce when the broad Nikkei 225 stock market of Japan rises 1000 points in 7 hours... The meme that stock 'markets' move on fundamentals not central bank liquidity is officially dead. Let that sink in for a moment...
Chart: Bloomberg
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Burn you Zombie Economy Burn!!!
sell stocks or buy stocks... doesn't seem to matter anymore.
If you have a money tree (or a printing press) you can keep buying and selling with yourself, or your siblings, cousins, dogs etc.
This is when "investors" get decapitated as they see huge volatility in individual equities - i.e. "quality" equities comprising outsized % of their portfolios lose value - even as Central Bank insanity floats indexes, leading to much cognitive dissonance.
What the BOJ has set in official motion is outright currency wars, which will serve a prelude to massive volatility in all asset classes.
Buy the VIX. The catch down to reality has officially begun despite any kneejerk reaction to Kamikaze Abenonics today.
p.s. - Don't be completely surprised to see a massive fade into the US close today, either.
I have a feeling you are going to be right. The fact that VIX futures aren't getting killed right now is interesting. Over the last 2 weeks, hundreds of thousands of VIX call options in the November expiration have been bought. Someone is expecting something big in the near term.
Anyone responsible for explaining the financial markets to the general public should be embarrassed by this, there is no good explanation that coheres with a functional financial system,
... but there won't be any embarrassment to speak of. Should have happened long ago. There is no shame, no contrition. All souls were sold long ago. Their ghosts roam the land pillaging on All Hallows' eve.
"Burn you Zombie Economy Burn!!!"
Careful what you wish for. There are always unintended consequences for every action. I suspect a burning economy will usher in the full retard Nazi state.
Nazis usually flourish under the protection of a State or free money creators, a total uncontrolled chaos will usher in unintended things.
Panic in Detroit...
In that case, Rip Van Winkle wakes up in 2030 to find a low-crime, low-tax, gold-money America with no Africans, no Muslims, no Latinos, no single mothers, and no idea how it got that way.
Green shoots? We are sprouting full blown Pine Trees Bitchezz!!
Is it just me, or am I smelling the scent of 1997? Does Merriwether have a new fund running?
•Russia Raises Interest Rates (WSJ)
•Futures rally after BOJ ramps up stimulus (Reuters), Japan's central bank shocks markets with more easing as inflation slows (Reuters)
Okay. You're way off the mark with this one ZH. Stocks are jumping because capital is flowing out of the Japanese debt markets and into anything else. Hell you guys pointed this out in the last article.
This is extremely bullish for US equities too, by the way.
then get long and strong--hot money flowing into equities--not metals or commodities--makes sense-much rather own a stock certificate from go pro
Of course it's hot money. Money that has been pumped into financial assets via QE. The point, of course, is that this money is going everywhere (stocks, commodities, etc.) but only a handful of global markets really have the market cap and liquidity to absorb the volume of the flows.
guess thats why cl is down a buck--not seeing the flow into commodties or metals--only looks like paper is being bought--guess all the money is going into put buying in the hard assets
--
Because you are not witnessing a static process. It is a dynamic equilibrium. So the rate of selling is greater than the rate of buying currently.
Watch the equities markets go through the roof because in the event of a sovereign debt crisis the big boys like the pension funds, sovereign wealth funds, and insurance companies have no really viable options in such a short time-frame. It's bonds or equities. That's about it.
When equities DO actually begin to respond rationally to fundamentals.. see: realistic valuations, there will be a flight into commodities, and most of the wealth in those funds is going to evaporate as the market crashes.
However, even a small fraction of the overall liquidity in the financial system is enough to push real markets up quite significantly, if folks begin to broadly transition from financial assets to real assets.
Wealth is moving out of Japan and will bring about its demise. While adding luster and supporting other stock markets such as US equities I will not go as far as to call it "extremely" bullish.
Japan and Europe are slowly setting on fire and there is an ocean of QE based liquidity in financial assets out there, with very few options as to where they can go.
Call it hot money, call it whatever you like. Either way that capital is going to flee to somewhere and US equities look good right about now, based on their market cap.
Look.. I don't deny that the fundamentals are terrible. I don't deny that it is stupid. But we're not talking about an individual investor here. We are talking about gargantuan mammoths (funds), who simply have restricted options as to where they can go given their size and scope.
Edit: In sum: This is only indirectly linked to BOJ policies. This isn't about the BoJ propping up markets, it is about funds repositioning their assets. Moving out of sovereign debt markets and into any other market they can.
And this is only the beginning. It will only increase from here as Japan moves toward default, and Europe begins to unravel too.
"...it's about funds repositioning their assets."
Those "assets" consist of gigantic wads of cash that have been conjured up out of thin air during the last six years. Like everything else under the sun, those assets look to their creator for direction. When their creator-- the central banks-- make a move, they follow.
You can call it a "market" where "large actors" are making "rational decisions", but the only relevant decisions being made now are the ones made by the central bankers.
No. They don't. A lot of the money has been accumulated over many decades of growth.
The Fed did put a floor on the stock market collapse and simultaneously recapitalized the banks. So yes, they indirectly shored up the financial positions of the funds. But they did not create the funds out of thin air like you assert.
Edit: Watch the Japanese Govt. topple and stocks to continue rising in the interim. Watch a crisis of confidence in creditors and a global systemic liquidity crisis.
Then watch the real price of real (not financial) assets go through the roof.
This article says it all! What is so different in a positive way for Japan to merit such a surge. This is not about economic growth it is about a shift in hot money. Japan is stuck with an aging and shrinking population that is evermore expensive for the government to provide for. Adding to its woes the Fukushima nuclear disaster has shuttered its nuclear power plants and forced the country to import more expensive energy alternatives.
Neither monetary nor fiscal policy will adequately solve Japan's problems. Continuing to run fiscal deficits only means that government debt is pushed onward and upwards leading to a variety of possible scenarios as to the what the end game will be. Simply put, the fundamentals for Japan are lousy. More on the downward path that Japan is on in the article below.
http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html
The world has a bunch of terrorists in the cockpit .....LETS ROLL.
The world has a bunch of terrorists in the cockpit
Yes, you are right. US of Attack, lies and deceit. What's there not to celebrate??
Gold is becomming more and more of a bargain.
Modern Japan will do what its creators will ask them to do.
Emperor Akihito was let to live for a reason.
Central bank actions affect fundamentals. The profits, profit expectations and cost of money are key fundamental elements, and are all heavily affected by central bank action.
Yesterday I saw a frantic ZH PM tin-foil mad-hatter proclaiming to load up, because we will never see silver at a 16 handle again. He was right. Now it's at a 15- handle. And the beloved silver bears continue their yearslong hibernation.
will never see silver at a 16 handle again. He was right. Now it's at a 15- handle.
Hahaha... but jokes apart, please dont rub it in bro.
Alan I see the light Greenspan recommending Gold was a dead giveaway but morons never learn.
Its like "Oh shit, a banana peel in my way! Now I will have to slip!"
I was silver when silver wasn't cool.
I would love to get my average cost basis below the $11 it is at now.
And you consider yourself wise because you didn't sell what it was at 45 bucks an ounce?
So what does Kyle Bass have to say about all of this?
And we laugh at Zimbabwe....
some of us laugh at people that missed the greatest bull market in history
This is like the companies doing a share buy back and not putting the money to work to build the business.
The central banksters are so fixated on the stock market 'must be propped up' to protect the 0.1% that they have totally lost sight of the consequences of what they are doing with their sheer stupidity
No - they understand the consequences, at least some of them do. They simply dont have an alternative or give a damn. Most of us here know its been this way for quite some time. Slowly, then all of a sudden money as we know it will die. Meanwhile we can watch the crack up boom live on our monitors.
And as for share buy backs as we know they juice executive bonus pools, but I was talking to a very high up at Kimberly Clarke recently about their buy back program. He insisted it had a lot more to do with their being nothing worthwhile for them to invest in - which I think chimes with what EKM has been saying for a while now. Buy stock, issue debt, lay off workers the 3 new rules of corporate success. Brought to the world by the central bank cartel.
Going to be an epic short (EWV) at some point soon
The Crack-Up Boom is on.