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Japanese Pension Funds Find New Ways To Lose Money, Will Blow Retirement Funds On Junk Bonds
Following yesterday's collapse in the Nikkei, when a 4% drop pushed it red for the year below 17,000, down 20% from a high of 21,000 hit just over a month ago, we had just one question for Japan's pension fund "fudiciaries" who have been "greatly rotating" out of bonds for the past few years as the primary sources for BOJ debt monetization, dumping trillions in fixed income yen, and promptly buying up equities: equities which have gone nowhere in 2015, and which have posted massive losses in the third quarter. The question was:
What are Japan's pension fund losses after the Nikkei wipeout from 21k to 17K?
— zerohedge (@zerohedge) September 29, 2015
Less than 24 hours we got the answer, when moments ago Nikkei reported thatQ3 losses at (at least one) pension funds were just under JPY 10 trillion in the third quarter.
- JAPAN PENSION FUND JULY-SEPT. LOSS LIKELY 9.4T YEN: NIKKEI
With Japan's economy already sliding into its 5th recession of the past decade, once pensioners open their retirement statements in a few weeks and find a 15% plunge in their purchasing power, Japan can skip recession and proceed straight to a consumer-driven recession.
But wait, there's more: because if pensioners are angry now, wait until they learn that they have lost everything, after buying all those junk bonds that Carl Icahn is now actively selling with both hands and feet, because...
- JAPAN PENSION FUND TO INVEST IN JUNK BONDS, NIKKEI SAYS
And just like that, with or without Krugman's active economic advice, Japan's fate is sealed because much to Japan's dismay, "junk" bonds are called that for a reason.
The good news for US shale companies: they just got a 6-9 month reprieve thanks to millions of Japanese pensioners who will starve to death in a few years. This is probably bad news for oil as the scramble to issue junk bonds in the coming weeks to take advantage of Japanese idiocy means taht the oil spigots will be turned on full blast.
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the new junk bond ETF buyer has been found... JNK back to 40!
http://hedgeaccordingly.com/2015/05/junk-bond-etfs-the-one-investment-yo...
We are buying chicken shit in Yen-terms. ;-)
Dennis Gartman
On the bleeding edge of financial suicide......
ooooooo, I know what they should do! They should bail out Glencore witht their pension money!!! ;-)
Japan has reached peak stupidity
How is the real-estate market in Japan, I have seen some documentaries on the empty villages. I would think there should be some cheap (relatively) farm land. I hear its beautiful country.
There's some nice farmland
just lying fallow around Fukushima.
I understand the prices there have recently dropped substantially.
Pity, I liked those guys too. Ah well, Japan pension got their face ripped off by Subprime, 80's real estate, social media... only natural they "go big or go home" on distressed yield-pig bonds. Whatever Japan was, its not anymore. Almost feel sorry for them until you remember nobody asked them to be the official market "top" for the past 3 business cycles + 2 supercycles.
The flipside is that GPIF understands the world has to go Japanese and Yellen, having abandoned faith in "animal spirits" will go full Kuroda. To which GPIF will pull a OTPP and get the mother of all windfalls upon BBB- debt moving to QE1 level spreads to 10y. Dumber things have moved the markets. Japanese dumb money usually does.
Can you tell me, have the people all lost their minds?
If they did this to my pension I would start burning down their fuken cars right away, maybe even their homes.
Everyone busy jerking off or what?
Well, in all honesty, the Japanese are the ones who have transformed suicide into a fine art. They just remain true to their nature...
As long as they stay away from hard assets and real money... they'll be OK... as in... KO'd.
they don't call them muppets for no reason
Sure, why not? They've done everything else, why not do that, too? They're just as broke whether they come up short by a single Yen or 200 quadrillion of them.
At least we'll get a few more japandate .com ads here.
further proof QE4 + negative rates are on the way. why the fuck else would ANYONE buy high-yield RIGHT NOW with it on the ropes & the "notion that the fed is going to start raising rates" which would knock HYG into the 3rd row???
Yea this time they are raising for sure!
Good one
Japan's this far down the rabbit hole, may as well go "all in."
Go big or go home! One thing is for sure, the Japanese can't be called financial pussies.
those poor vassal bastards.
Coming to a pension fund near you..., oh wait we already have U.S treasuries.., nevermind.
There won't be any pensions for the next generation of slaves. They will never even learn the concept of saving, as they will have to live from hand to mouth all their lives. Pensions are so Y2K, today you lever up and hit the roulette, fuck saving.
"And just like that, with or without Krugman's active economic advice, Japan's fate is sealed because much to Japan's dismay, "junk" bonds are called that for a reason"
"Japanese pensioners who will starve to death in a few years".
~ They don't care about loss, just keep printing to cover.
As to pensioners starving to death, that would be seen as a big, big problem solver!
Why not hookers and blow for the whole country? Might keep a few of those heads at the top from rolling. But they just can't stop being dicks to everyone, no matter the cost. Curious, isn't it?
How to be happy despite taking a loss https://www.youtube.com/watch?v=0T-BH8-yBmU
Sounds reasonable. Why would the Japanese people need retirement accounts? They'll ALL be dead within ten years from radiation poisoning. Sad really.
It is amazing how they just keep doing the same crap over and over with printed money....they will get their pension...but it will not buy to much when 60% of the population is on it...
Whats the difference between
abe'sville
&
o'sville
nothing
is this your fathers socialism
pensions in this world are the next subprime, "but they were aaa rated!, we must be bailed out! "
Let's bail out everyone who ever fails, we can all be millionaires together forever
Parking "junk" cars with printed money, so sell new ones!
Next, the interest on these junk bonds will be paid in PIKS, (payment in kind) ala Stock "rights".
And finally, we will have the NEW Yen, at an exchange rate to be rigged between the new USD, EUR, and the RMB!
All shall be well.
Or War - in which case, well, it was inevitable.
Nobody coulda seen that one coming!
Abe, I have some Spiderman towels to sell.....for a good price of course
well after all
these r the same silly mother fuckers who flew planes into ships when the war was already lost u know......
I have not seen anyone consider that THIS TIME it.....might.......just.........work!?
And whoever follows Abe will have to deal with millions of starving, homeless, Japanese seniors as those bonds go bust.
Poisoned economy to go right along with a poisoned island.
Coming to your 401k soon.
Japan is like a bad trader in the middle of one of his worst drawdowns ever, stabbing at every trade. Maybe this will work, nope..fuck... Maybe this will work, nope, double fuck... This one looks decent let's go all in... KaBOOM!
I remember Kyle Bass saying they had like a dozen Finance ministers in three years.Nobody wants the job. Captain of RMS Titanic.....
A highway to extinction is what they are on. Declining birth rates? Rising government debt? Increasing costs? Clearly we must saddle the remaining youth we have left with more costs and debt to support everyone on their way out, that way there will be less people complaining when it is the youth of today's turn to collect and there is nothing left.