This page has been archived and commenting is disabled.
Is The BoJ The Next SNB?
A promise is a promise is a promise... especially if it's from a Central Bank. That was true and undeniable for decades of BTFD 'equity market put'-provision by the world's central planners... until Wednesday. But now, on the heels of the Swiss National Bank's 'victory' against the vicious cycle of currency wars and monetary debauchment, The Asian Nikkei Review reports stirrings in the Bank of Japan as one official warns, "we have caused tremendous trouble for the financial industry," and many others growing anxious about continuing its massive purchases of government bonds (confronted with the program's negative side effects) and pressure from the financial industry is strengthening by the day "to scale back monetary easing soon."
As The Asian Nikkei Review reports, Japan's central bankers mull diminishing returns from bond buying...
Some in the Bank of Japan are growing anxious about continuing its massive purchases of government bonds, confronted with the program's negative side effects.
Pressure from the financial industry is strengthening by the day, according to high-ranking officials at the central bank.
The BOJ's buying of huge amounts of Japanese government bonds has pushed long-term interest rates to unprecedented lows. This has made it impossible for insurance companies to generate sufficient returns on JGB investments to pay benefits to policyholders.
Nippon Life Insurance will thus raise premiums on lump-sum whole life policies in February. And Fukoku Mutual Life Insurance is considering halting sales of lump-sum endowment insurance and other products.
The longer ultralow interest rates continue, the more likely other insurers are to take similar steps. Household finances would suffer.
Money reserve funds, used for parking individual stock investors' unused funds, are another financial product hit by ultralow interest rates. MRFs put money into short-term government bonds and other safe investments. Generating positive returns on the bonds is becoming nearly a lost cause because negative yields have become the norm for not only short-term government debt, but also two-year JGBs.
With five-year JGBs at zero for the first time Tuesday, "it could become impossible to offer a positive interest rate any moment now," an MRF manager says.
The BOJ has discussed these costs at its policy board. When the board took up additional easing measures in a late-October meeting, some members raised the specter of hurting earnings at financial institutions and giving the impression that the bond-purchasing program is actually a scheme to enable deficit spending. The board decided to step up the program anyway, judging the benefits to outweigh the costs.
But the benefits have started to fade. With loan margins already crushed by ultralow interest rates, banks have little room to cut lending rates even if JGB yields sink further. And yields on corporate bonds "have started decoupling from the continued march toward further lows by government bond yields," a brokerage analyst says.
Even within the central bank, more are now coming to believe that the additional benefits of further easing the interest rate channel are clearly diminishing.
"Since nominal interest rates are already at historically low levels, the marginal impact of more easing aimed at putting upward pressure on consumer prices is not strong," policy board member Takehiro Sato said in a speech last month, explaining why he opposed additional easing in October.
...
"We have caused tremendous trouble for the financial industry," a BOJ official says. "I hope we will be able to scale back monetary easing soon by achieving the price stability target as projected."
* * *
So will The BoJ be the next central bank to 'break' a promise, swallow the red pill's painful truth of reality and allow market forces to create the platform for recovery?
»
- 24927 reads
- Printer-friendly version
- Send to friend
- advertisements -
KABOOM!!!
This is just the tip of the damn icebirg. Watch out BITCHEZZZ
Plomises, Plomises.
Brack swan.
when this mother f***** picks up speed rolling down hill and gets really going there won't be any stopping it
Ho Ri Fuk....Wi Drop Soup next week
Japan will simply cancel their debt by printing.
Saturday evening Seppuku ritual sacrifice to the monday morning financial gods...
Rut Roh Reorge... The Shashimi is in the fire now... If the BoJ folds, it's game over and the derivatives bubble goes BOOM.....
Rock..e..a..r.fell...whatever, told us long ago, "While you're busy dealing with the current crisis, we'll be writing a new one for you". Let's skip a few steps. Bankers and politicians swing. Soon.
It appears your message is lost in the noise.
We keep waiting for the big crash, but in reality, it starts with diminishing returns, which reduce the effectiveness of their efforts, as Japan is experiencing. Reduced effectiveness means less control, and less control means greater consequences, which leads to less confidence in their system.
But, once it gets to this point, the momentum picks up mighty fast, as the smart rats start jumping first, which leaves less rats to hold the line. It won't be years for Japan, not when it gets to this point. We're talking months now.
If that's true, then we're looking at a major war/'terrorist attack' very soon. These fuckers are not going gently into that good night..
Racist. (I love this site)
Rapid Unscheduled Disassembly ... coming soon to an economy in your area
God, that kind of gobbldiegook newspeak drives me nuts!
I have a grossly maligned over-sized glandular condition in need of significant relief.
Shit's like finding toenail fungus floating in the coffee cream
AAAAAAARRRRRAAAAGGGHH!
Sounds like an extreme case of cyanotesticular megaly.
It's not the fall that kills you, it's the rapid deceleration at the bottom when everything goes splat... We've been waiting 20 years for Japan to pop... Could this be it?
Considering some of the decisions Japan has made lately I expect something extra special stupid but my imagination boggles at the possibilities....
My thoughts as well.
"some members raised the specter of hurting earnings at financial institutions and giving the impression that the bond-purchasing program is actually a scheme to enable deficit spending."
Get the flock out! You mean that these bond purchases are POSSIBLY used to fund deficit spending? Well I never ever ever thought that that might be the case!
And if they stop the presses, who in their right mind would buy a JGB?
The only other option now is default.
They will keep printing until the debt is inflated away.
Who cares if Mrs. Watanabe can't afford rice cakes anymore?
I agree. The difference here is that the SNB had a choice, the BOJ doesn't.
They deserve what they get for listening to Krugman
#22 Give bad advice to governments and everyone else
We have Krugmanned some folks
And in the immortal words of Ron White, you can't fix stupid...
There is only pain from this point on.
I am afraid a lot of "anal" pain too. Watch out for the west wind.
Plenty of pain to go around.
BoJ would never do such a thing! Just because they might have rammed 1000 pips down your throat out of the blue one evening in a fit of anti-speculation rage, doesn't mean they'll do it again. You're suggesting that they're some sort of self protectionist renegades, which is wholly unfair.
One only has to consider that a very sick nation like Japan is almost the largest creditor of another very sick nation called the USA.
This is a paradox both as to how a sick nation could lend so much and how the other sick nation could borrow so much.
It is this sleight of hand by both these nations that allowed them to consume resources from the rest of the world and to infect the rest of the world for too long.
And the reality of the matter is that the masters of both these nations would gladly let the axe fall where it should were it not for the fact that they fear that their own necks and wealth might be the first causalties as they find themselves in an adjustment period they cannot control.
China and Russia are teaming up to take care of both!
"There must be some kind of way out of here, "
Said the joker to the thief,
"There's too much confusion, I can't get no relief.
Business men – they drink my wine
Plowmen dig my earth
None will level on the line
Nobody of it is worth."
[/Jimi Hendrix]
The hour is getting late...
"So let us stop talking falsely now....the hour is getting late" and its truer than ever
Actually Bob Dylan, but Jimi did it good.
Jimi did "Like a Rolling Stone" live at Monterrey - Jimi does it as almost a completely different song, driving the guitar chords with a harder beat from drummer for most of the song. Love this.....
https://www.youtube.com/watch?v=dpjaISwrZUg
Not Hendrix. Bob Dylan. Hendrix just did the cover that everybody remembers.
Saw Jimi do that live in a teeny tiny theater in London.
Exceptional
Sooo, the music has stopped and the Swiss sat down first?
BTW, i'm selling 4 Jimi Hendrix tickets for his show at the Garden next month.
thanx 4 the correction
After Jimi's version came out, Dylan regularly played the song in concert to that arrangement.
FYI.
Hendrix cover is so doom laden prophetic and eerie-i love it....
Interesting. Thought the words were " plowman dig my herb"
BS they will never give up now
If it is going to interfere with my government funding I recommend that they PRINT more.
The wheelbarrow still will cost 250,000 yen.
Long wheelbarrows.
Oooopsss emperor has no clothes is a .......
"Some in the Bank of Japan are growing anxious about continuing its massive purchases of government bonds, confronted with the program's negative side effects."
There's payback for following the devil's (US federal Reserve) financial plan.
People may as well learn now that the entire "whole life" insurance industry was just another scam - sorry folks. You got tricked fair and square See what you get for trusting people? You should be ashamed of yourselves
Saturday humor that never gets old
Oh holy Jesus.
Take her only on serious dates; corpse dissections and the like.
Is that for real?
W..T..F!!!!!!!! :-)
hysterical hysteria
This decades old observation should be amended to:
THE DANSE MACABRE OF THE CURRENCIES HAS BEGUN, AGAIN.
Is Tokyo Burning?
No, but it does glow in the dark....
Yuo could have said Nagasaki and Hiroshima do though?
and now Fukushima
Japanese Centrah Bank have a vely smah penis... vely smah.
No...she blows.
Okay, we're shocked that the __B's will manipulate us.
How can we tell this realization is being priced in on a significant scale?
Other than the S&G, I can't tell. Probably the composite/aggregate numbers are always OPM, so no need for fidiciary responsibility there ...
To endlessly pretend omniscience does NOT boost credibility.
The Swiss action was an act of despair. Whatever the ecb will do is also an act of despair and what the boj and the fed will do will also be acts of despair. Indeed, "despair" is the 2015 word.
Disagree as to the SNB action. While not an act of courage, it does represent a moment of clarity on the part of a normally pragmatic nation.
What adjustment would they allow?
A 50 bps rise in rates would probably exterminate the entire federal level debt structure of Japan.
This is like watching Hitler move long dead division markers around on thr map in the last days...
Population.................
Japan: 127 Million
Switzerland: 8 Million
Swiss/U.S. Rank if a state: 8th (Virginia and Washington state about the same)
Apples to Oranges........
THE BIG PICTURE?
Same bankster controlled Kabuki....
GDP of Switzerland is about 1% of world GDP
GDP of Japan is about 8% of world GDP
So, yes, big difference
japanees are good at falling on swords, admitting defeat and bowing there heads when the time comes. they will just completely default and say they were wrong, sorry, i am not worthy to live. then the rest move on. that is what they do.
A 'return to normal' is a quick trip into a deflationary spiral and I am not buying it. Deflation will not be allowed...period....QE will reign until the end. This talk of ending it, a return to policies that work in a normal economy, is just talk to allow the folks to think it is still possible. NOTHING has changed!! We are still in the same situation we were in 6 years ago. If they had any intentions of allowing a collapse they would have done it then!!
no body allows a crash. they happen. this is not a crash for the swiss. japan will not allow a crash. it will happen, they will say sorry. then they fall on swords. japanees understand acceptance of tragedy.
I don't know what the BoJ will do- I think it equally likely they will increase QE and start buying other assets within Japan, or they might well end QE. Either decision will cause enormous damage.
The Japanese long ago entered the no-win zone and have compounded the position that got them there.
The current situation is just unstable. It does not matter what they do or which direction the rocks fall. It will fall.
BOJ stops QE or bond buying from printing, rates go up, they cannot pay - default.
BOJ keeps buying the bonds, rates too low, investors will not buy JGB, rates rise - default.
Why is there still a financial system in the West after Wall Street went kamikaze in 2008?
Government bailouts to deal with the initial crisis.
Lots of Central Bank QE and low interest rate policies to repair banks balance sheets after years of incompetent trading by investment bankers.
Why did Central banks start to intervene?
Wall Street lost all site of fundamentals and went into mania mode over the new intrenet before 1999.
Just like the Tulip traders in 1600s Holland.
Modern markets sophisticated?
You have got to be kidding, no change in 400 years.
Central banks are the only thing left in the "new normal".
The zombie, insolvent banks no longer invest in the real economy and just skim money out of it.
The money the banks do have, they use to recklessly gamble in financial markets.
After 2008 the era of easy prifits came to an end and the "wealth creators" retired to their luxury yachts waiting until someone else had sorted out all the problems and the era of easy profits returned.
Central Banks only have one tool in their tool kits, the "throwing money at the problem" tool.
It does have a couple of settings, eg: QE, low interest rates.
The only thing Central bankers can do is throw money at the problem to distort markets.
Like all bankers, they don't realise that eventually the fundamentals win out.
Welcome to the "new normal".
This and the Swiss depeg is all by design. For historical perspective consider:
On March 9, 1929. Paul Warburg, who was essentially the Goldman Sachs of that era, wrote in the Financial Chronicles. Notice this was penned well after the orgy already did its damage: “If we allow orgies of unlimited speculation to go too far, then a total collapse is assured.” Those who understood quietly withdrew from the stock exchange and invested in gold and silver.
DS Griffin, in his classic book Descent Into Slavery, adds:
“In the fall of 1929 it was time for the International Bankers to push the button that set in motion the machinery that resulted in World War II. After they, their agents and friends had sold out of the crest of an artificially inflated stock market boom, the International Bankers pulled the rug out from under the whole system and sent the United States into what became known as the Great Depression. In the years that followed, the economies of nations around the world slowed to a virtual standstill.”
The financial sector is showing classic signs of sibling rivalry.
When the little brother (traders) went into mania mode over the new internet it all crashed and burned in 1999.
The big brother (central banks) picked them up, dusted them down and tried to ease their pain with low interest rates.
When the little brother (traders) went into mania mode over sub-prime it all crashed and burned in 2008.
The big brother (central banks) picked them up, dusted them down and tried to ease their pain with low interest rates and QE.
The little brother (traders) seem to a bit envious of their big brother (central banks) who has to keep rescuing them from their youthful impetuousness.
The psychopathic banker model fits as well.
The psychopathic bankers caused the problems in 1999 and 2008.
They take no responsibility for this and pin the blame elsewhere.
They have taken no reponsibility for 1999 and 2008 so it cannot even occur them that Central Banks are trying to cure the problems the psychopath bankers created.
Believe any shit you want, but I will put a wager on this. The SNB decided to pull off the peg because they quite correctly calculated that Greece will get a new Govt, that the fucking thieving cunt Druggy Draggy is NOT going to do his his fucking half baked ponzi shit AND keep Germany on board, and that whichever way it goes, the end result will be 1) collapse of France into Greece, Italy will drop like a turd tied to Musks rocket, and next German EXIT. or 2) Germany has already tipped them off that that is its plan anyway. To EXIT
Why wait for the inevitable when you can prime it with the very very compliant SNB that only does anything after Germany approves it. Think again. Germany wants its own back on those fuckers and is not going down with Europe to satisfy the fucking warmongering cock suckers in Washington who are planning to throw the rest of Europe into war to satisfy its own fucking evil illegal and utterly fucked up plans with regard to Putin and Russia.
The observation that Jordan was fumbling and at a loss for words leads me to a couple of possibilitiies:
1. They became aware of something they can not talk about, or
2. They were told point blank what they were to do
Jordan has already been caught with his wife's hand in the cookie jar. Easy mark.
And, let me say that CH has been in an orgy of construction, etc and some people are ridiculously rich. A recent story discussed a couple who spent 60,000 CHF for a fish to add to their already large collection. "Ah, but it is a very special fish. It is trained so you can pet it."
Is the aftermath of dropping the peg about bringing the Swiss in line with the plan (this independence thing is a thorn in the side of the big planners). Or is it a global domino push. I guess we will see.
The cynic in me agrees. Get all of Europe to USD par & lock it in, then bring on the actual EuroDollar. Now, how to get the Brits to devalue massively & to give up on their currency. They need something serious like to exit the EU, lose the City-of-London EU business to Frankfurt & then end up with EUR/USD/GBP = 1, wrapping the whole of Europe & the US into 1 single currency that the banksters can then use to control us all!!
On a slow timeline losing the city of London is already in progress.
EU referendum soon (unless the politicians break their promises) and that depending how the EU reacts (oh luvvie ECB QE next week) should make an out a dead cert.
The economic system even making a unified currrency doesn't work and will just keep stacking hidden debts faster.
"Jordan has already been caught with his wife's hand in the cookie jar. Easy mark. "
you mean Hildebrand??
he's with Blackrock now.
promotion lol
Correct - thanks.
Of course, manipulating these guys is likely not difficult.
Agreed. Think EU QE will dissapoint, as the Germans (I mean industrialists) don't want it & they want their gas too so need to look East. Biting off their nose to spite their face because of what the bankster EU lords tell them is just not good business & I think ultimatley they will say no. We need to give them time, I don't think they're gonna allow the war that America wants in Europe. It takes time but the bankster reckoning will come, after the Grexit, the Italexit & the Spexit if you ask me. Anyway, I think ECB will dissapoint next week, take out the most overcrowded trade in years then maybe announce something before the Summer, if at all. US/JP QE infinity is coming first I think.
People of Japan got what they asked for. Reap your angel - inflation
BOJ or FED and everybody else carrying out a QE program is limited.When you use QE and then purchase you end up owning everything and there really is nothing left after that.
You own 100% of everything already ... what do you do next?
So many things they could do but if it costs them personally in any way then it will never be considered.
what did they think was going to happen.
f*ckin' bankers and their ecomomist brethen don't have the brains to p*ss a hole in the snow.
pariahs
Takehiro Sato, a Morgan Stanley tool, could be saying this as a distraction or maybe he's a DPJ guy trying help Abenomics fail. "Since nominal interest rates are already at historically low levels, the marginal impact of more easing aimed at putting upward pressure on consumer prices is not strong," policy board member Takehiro Sato said in a speech last month, explaining why he opposed additional easing in October. Takehiro's in the minority and only 53/4 years old. Way too young to have any say in that Viagra fueled, pantie sniffing BOJ team. The printing will not stop.
I've long found the idea that higher prices for the goods everyone needs should be a national priority.