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German Bund Yields Below Japanese Bonds For First Time Ever As BoJ Loses Control
Well that escalated quickly... while the trend of Bund yield collapse continues, the biggest driver of this unprecedented shift. For the first time ever, German 10Y bund yields are trading below (3bps below) Japanese 10Y bond yields as since Q€ the spread has collapsed 35bps. A very weak JGB auction overnight suggests the BoJ is losing control of the world's biggest bond market...
Accelerating since Q€...
Charts: Bloomberg
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olympic/chinese downhill... ...looks like the Japanese skiier just caught an edge!!
ZIRP is looking like a very black hole.
"To infinity! And beyond!"
Yep, more free money to the bankers and financiers but NOTHING for main street and still the fucking sheep can't figure out why only the wealth of the bankers and financiers is growing!!!
until sales of nail guns and guillotines increase more of the same.
"What the @#$! is the chinese downhill?"
http://www.youtube.com/watch?feature=player_detailpage&v=_Qe3HBqFhTU#t=35
BOJ losing control?
Come on...
But wake me up when Japanese 10Y are yielding 5%.
5% is game over.
3% is game over, maybe even 2%.
Totally agree. Even with these low yields, Japan pays some $250bn per year in interest. So 2% is definitely game over...
But not many "trading" days will pass for the yields to go from 2% to 5%. So it's kind of the same, isn't it?
"5% is game over. "
4% the game isn't just already loooonng over: you are probably a petrified fossil forgotten in an abandoned old ruin of a stadium that is being demolished to make way for a whole new world paradigm...
IMHO, the US can't go to 4%, let alone Japan. LULZ.
Exactly, the bankers and financiers still helping themselves to free money. Raise rates already motherfuckers.
A yield of .366% on ten year money doesn't sound to me like anybody is losing control. Wake me when yields blow out by a few pecentage points and I'll know shit's getting real.
Yeah, but a couple more moves like this and then control may be lost...well before the few hundred bps of yield are piled on. Think of it as a dam bursting---you know it's going to be bad when the break first happens; you don't have to wait until everyone drowns.
I'd like to see it happen, but I believe it will happen so fast we won't know wtf just happened. If yields go above 1% it will be pretty obvious it's becoming too much to contain.
Like you have said many times Doc, things will get vaporized.
POOF!!!! Aaaaaaaaaand it's gone...
How do you say: "Hory Chit, Sum Ting Wong" in German?
... und keine Eier
Raise rates???
Some of these fuckers don't even know how to.
Mark Carney is on his second job as head of a CB, I think he's been a head for 7-8 years. And in that time he's never raised rates.
Can you believe that? Sadly, we all can.
Japan and Germany were once allies in a shooting war, but in the currency war, not so much.
Read...not saying its true...but Bloomberg reported Chinese trade surplus was 60 plus billion last quarter but they had a capital flight of over 90 billion.
That sounded pretty ominous to me.
the quadrillion yen coin has already been designed. it could be minted immediately.
the best thing japan can do is go full yellowback, not this half ass stuff, like canada may be forced to do. japan is literally halfway there as .gov owns half of jcb.
that is really a model that can work with responsible stewards. using a gold/commodity/currency standard would keep a lid on things. the biggest problem would be having to find jobs for a bunch of unemployed squid.
The Tylers rarely get it wrong, but I think they might have here (unless they're being sarcastic which is entirely possible).
This isn't a sign of Japan losing control but of Germany/Switzerland losing control.
I know the last uptick is JGB's yield, but over the near-term past Bund yields have been falling faster than JGB yields have risen.
It all depends on how fast the SNB has to unwind their position, but as they unwind there is going to be downward pressure on the Bund yield curve. I think having one's yield curve sucked into a black hole is a scarier sign of losing control than a possibly oil price driven uptick in rates.
There is a point of no return on that curve sliding down where very very bad consequences become unavoidable. Bank assets will become unable to pay for bank liabilities which will cause tremendous central banking losses and result in bankruptcy of the CB along with the loss of faith in one's currency which is another way of saying hyperinflation (which rarely has much to do with actual printing of money but rather what someone with another currency is willing to pay for it).
I would expect the SNB to go down first though. They are in a world of pain.
thank you for the great comment !
could you please expand on this line --Im trying to get ready for the debt bomb ..Thankx