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Nikkei Hits 20,000 After Japan's Economy Minister Says "Bubbles Are Good"
With BoJ plunge protection underwriting a relentless risk asset rally that, in conjunction with nonexistent wage growth (both on a nominal and a real basis), is working to eliminate Japan’s middle class even as it sends stocks to new highs and enriches those who hold financial assets at the expense of those who do not, some wonder if perhaps throwing the government’s printing press at equity markets on the way to saddling the central bank with a multi-trillion yen ETF portfolio isn’t likely to create bubble conditions that could imperil the entire economy.
Not so, says Japan’s Economics Minister Akira Amari because as Reuters reports, smallish bubbles are actually a good thing:
Amari, who spoke after the Nikkei stock average briefly hit a 15-year high, said the rise [in stock prices] reflects expectations that corporate earnings will improve further and noted that the government needs to put policies in place to ensure this happens.
It is unusual for a policymaker to speak approvingly of an asset price bubble as the danger of it popping and wreaking economic havoc is well documented.
However, Japanese Prime Minister Shinzo Abe's government has placed a lot of emphasis on lifting stock prices to increase returns for individual investors in the hope that they spend some of this money and revive the economy.
"The larger a bubble becomes, the harder it is to control," Amari told reporters.
"A small bubble is something that can be contained. If recent stock gains are signs of a mini-bubble, this is something I would welcome."
Well that’s good to hear because as the following chart (which shows the spread between closing prices for the Dow and the Nikkei) seems to demonstrate, there may indeed be a “small” bubble in Japanese stocks thanks in no small part to the central bank’s decision to become the second-largest holder of equities in the entire country:
* * *
Of course it's also possible we just don't know up from down which is why we thought bubbles were inherently dangerous in any size and which is why we also mistakenly thought that a multi-trillion yen equity portfolio could be fairly classified as "large," an assumption Haruhiko Kuroda later assured us was erroneous.
Bonus chart: plunge protection...
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There' a MAN in my bathtub!
Talk about inflated ....
http://www.dailymail.co.uk/health/article-3033539/The-man-HALF-STONE-pen...
"Bubbles Are Good"
... until they burst.
https://www.youtube.com/watch?v=z07G2DVRVos
"contained" LOL
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
The last bubble led to "the lost decade(s)" and counting.
They never give up nor admit anything.
Everything is wonderful, so gather around the campfire and we'll make S'mores and sing Kumbaya......
anyone make an abe or kuroda bobble head doll yet?
https://www.youtube.com/watch?v=pnQX8_dqnBg
Wait a minute, didn't the Nikkei already hit this level back in the 80's?
36,000, if my memory serves.
35,000 I believe was the peak in the 80s. Great inflation adjusted ROI no?
The all time high for the Nikkei was on December 29th, 1989. It closed the day at 38,957.00. So even at 20,000 today, it is still about 48% lower than it was over 25 years ago. That is some good ROI!
Must be the new non-GAAP accounting that allows losses to become profits...
Maybe that is where our markets are taking their cue from. You can only leverage yourself so far before it breaks, but we just keep leveraging away!
How does the bankster cabal manage to find people stupid enough to play some of these roles? Imagine what it would be like to say "Bubbles are good" without, one assumes, the understanding that the very definition of a bubble is that it eventually pops in a disorderly fashion! It must be like being clinically brain-dead.
How else can stupid people find such a wildly successful career?
Every evildoer loves "Useful Idiots."
"A small tumor is a good thing, it can be dealt with."
IF hear the words, 'bubble or terrorist' one more time I will shoot myself in the head.
Drew
I guess that makes most of us Bubble Terrorists.
I wish terrorism was in a bubble cuz then one day it would pop. It's gonna be here forever cuz noone can ever defeat it. Long live terrorism.
They know the system is doomed and they're trying to blow this shit up.
No way out. They are all going Thelma and Louise style. Pedal to the metal.
hahah damn right bubbles are good
Pladizow's old avatar had some sweet bubbles too. (and he never coughed up the source - bastard).
Just keep inflating the stock bubbles larger. That and ever-more and larger QEs. When it does blow it will be quite an event.
In effect nationalizing the stock market. If a rigged market worked so well then North Korea should have been the richest country.
WTF? I'd like to know what parallel dimension this guy has been living in. I guess bad macro is good macro for him.
Amari, who spoke after the Nikkei stock average briefly hit a 15-year high, said the rise [in stock prices] reflects expectations that corporate earnings will improve further and noted that the government needs to put policies in place to ensure this happens.
It's unanimous! - dream state of bliss all around the globe
pure madness
https://www.youtube.com/watch?v=TzB411aetgM
That's right, you keep playing The Game as long as it's "safe".
FYI, it will remain "safe" until... The Yield for US bonds go to Zero, AND we've had QE4, 5, or 6. Then and only then will we will out of excuses and places to hide. The hair-triggered loss of Confidence will slide like a triggered avalanche. Until then, it's BTFD, BTFATH!
.
BTW, if you HAD to lose your bet, in which scenario would you rather lose it: (a) When everyone else has also lost it? or (b) when you've lost it but others are still winning?
If you were into stocks the last two years, you made money with tons of others. If you were a know-it-all contrarian and followed the PM shills (who probably made money on Pump & Dump), you lost your shirt.
That's why you can't avoid the immutable laws of Investment and... THOU SHALL DIVERSIFY* (Income streams and Investment vehicles). You must diversify, if you want to keep you money, sanity and lifestyle. And fuck the Perma-bulls and Perma-Bears**, who are making money on Traffic (i.e. Fees, Commissions, Referrals or Pump & Dump bets).
* Primary, Secondary, Tertiary Wealth.
** I think that ZH blogger Fonzanoon came to his CFP-senses in time, and returned to where he could actually make a living (the Market), cause you sure can't make money or a living on ZH (unless you're TD).
Hey Capt. I don't think ZH is advising anything. IMO they are just bringing to light the fraud of it all.
If you wish to participate that's your business. I personally think they're doing a fair job of giving us the rest of the picture.
Wow. Yesterday I jokingly said bubbles are good. This guy is serious.
*delirious
The Japanese keep shitting in their own bathwater.
for fuck's sake - I don't know what the answer is, but it's not neo-Keynesianism.
What will it take for them to do something different?
Godzirra?
Removal of Rockefeller influence, perhaps?
This isn't Keynesian, This is outright fraud.
Okay, I know some will say they're the same but I'll bet even Keynes would not agree to all this counterfeiting.
And I'll bet Al Capone said a small drink was a good thing.