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72-Year-Old "Mad Dog" Wakabayashi Warns "Reversals Will Be Massive In Scope"

Tyler Durden's picture




 

The infamously named "Mad Dog," 72-year-old former trader Eishi Wakabayashi, who previously called JPY's tops in 1995 and 2011 is out with some dire forecasts.

Wakabayashi, a former foreign-exchange dealer who built a reputation for long-term chart-based market analysis, predicted the yen’s surge to a then all-time high in April 1995 and also foresaw the end of the strong yen era by early 2012. He joined Bank of Tokyo, now Bank of Tokyo-Mitsubishi UFJ Ltd., in 1966, and earned the nickname “mad dog” for his aggressive trading style.

As Bloomberg reports, Eishi says the yen has already passed its low and may strengthen to 100 per dollar next year as the Bank of Japan’s unprecedented stimulus is failing to revive the economy...

“The dollar is destined to decline against the yen because it’s been supported forcibly,” meaning the Japanese currency’s 2015 low of 125.86 was an excessive depreciation, Wakabayashi said in a Sept. 25 interview in Tokyo.  “The quantitative easing worked only psychologically on asset prices, weakening the yen and lifting stocks while failing to boost inflation. That’s become clear and we will see the repercussion from these shock therapies.”

 

...

 

Reversals will be massive in scope, possibly driving down the Nikkei 225 Stock Average toward 10,000 from about 17,500 now and the yen will strengthen beyond 100 per dollar next year, he said.

 

 

The world has been in a deflationary cycle since the collapse of Lehman Brothers Holdings Inc., evidenced by the euro, crude oil and a gauge of average commodities futures prices all peaking out in 2008, while risk-asset prices are merely buoyed by aggressive global monetary easing, Wakabayashi said.

 

As the accommodative policy has failed to end global deflation and artificially inflated risk-asset values are running out of steam, the dollar’s strength is reminiscent of the yen’s appreciation that hurt the Japanese economy during decades of price declines, he said.

 

“The U.S. will have to eventually resort to a weak dollar policy as deflation deepens,” Wakabayashi said.

We leave it to "Mad Dog" to sum up...

“It’s obvious the U.S. is headed for deep deflation, hurt by the strong dollar,” said Wakabayashi, 72. “The Fed raising rates in this environment is not only ridiculous but harmful. U.S. stocks are plunging, not because of the prospect of a Fed rate hike, but to prevent it.”

 

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Thu, 10/01/2015 - 22:08 | 6619030 ThirteenthFloor
ThirteenthFloor's picture

Quite obvious at this point. Big question is not depression, it's how hard will the elite hang on or try to "enforce" the dying US dollar regime.

Thu, 10/01/2015 - 22:09 | 6619035 JackT
JackT's picture

I've Given Her All She's Got Captain!

Thu, 10/01/2015 - 22:13 | 6619053 blindman
blindman's picture

what, are you related to that simple
country doctor?

Thu, 10/01/2015 - 22:28 | 6619092 JackT
JackT's picture

That's what she said

Fri, 10/02/2015 - 06:49 | 6619657 aint no fortuna...
aint no fortunate son's picture

you've gotta love a guy named Mad Dog, if I had a kid I'd name him that... reminds me of my favorite sauce back in the drinking days - Mad Dog 20/20

Fri, 10/02/2015 - 09:06 | 6620040 scrappy
scrappy's picture
People Are Calling This Speech By Marine General 'Mad Dog' Mattis 'The Most Motivating Speech Of All Time'

http://www.businessinsider.com/marine-general-mattis-is-a-warrior-poet-2...

https://en.wikiquote.org/wiki/James_Mattis

"Be polite, be professional, but have a plan to kill everybody you meet."

"That said, there are some assholes in the world that just need to be shot. There are hunters and there are victims. By your discipline, cunning, obedience and alertness, you will decide if you are a hunter or a victim. It’s really a hell of a lot of fun. You’re gonna have a blast out here!"

Go get em fight club.

 

Thu, 10/01/2015 - 23:34 | 6619260 Fukushima Fricassee
Fukushima Fricassee's picture

"For Gods Sake Jim , I'm a doctor not a central banker" 

                     Bones

Fri, 10/02/2015 - 05:52 | 6619606 redd_green
redd_green's picture

"Scotty, Scotty... if I don't get Warp 9 in 10 seconds, you're fired!"

"Aye captain, but thooose pylons are sure to bloow!"

Fri, 10/02/2015 - 07:51 | 6619775 Md4
Md4's picture

It's not enough, Mr. Scott...

We

Need

More

Power...!!

m

Fri, 10/02/2015 - 12:28 | 6621293 Winston Smith 2009
Winston Smith 2009's picture

"the dying US dollar regime"

The least dirty shirt in the hamper will have no competition at all for quite some time after the next crash. During the crash, the world will, as it always has, rush to the US dollar.

The EU as it now stands will be toast as will be the Euro (i.e. the Germany currency). China is going to crash hard, hopefully with a civil revolt that will put the corrupt scum in the Chinese Communist Party where they have sent so many Chinese citizens, Japan is toast, Russia is toast.

However, when China and Russia eventually recover they will THEN be major monetary forces, but that won't be for the many years it's going to take to recover from this huge pending debt crash.

Thu, 10/01/2015 - 22:09 | 6619036 nmewn
nmewn's picture

OMG! Not a measly quarter of one percent! 

Why...why...it could be the end of the financial world as we know it!!!

Like...totally.

Thu, 10/01/2015 - 22:10 | 6619038 caribbeanbarry
caribbeanbarry's picture

Stocks are plunging to prevent a rate hike?  Sure why not.  The tail alway's wags the dog...

Thu, 10/01/2015 - 22:11 | 6619046 blindman
blindman's picture

you have yet to see the dog in tail
disguise?

Thu, 10/01/2015 - 22:14 | 6619057 ThirteenthFloor
ThirteenthFloor's picture

Stocks plunging because carry trade game is no longer working. The point in article as you point out is not quite right.

Thu, 10/01/2015 - 22:48 | 6619143 tc06rtw
tc06rtw's picture

  
 Next thing I suppose you’ll tell me is you expect people to earn their salaries!

Thu, 10/01/2015 - 22:36 | 6619039 blindman
blindman's picture

yes and yes, it is "our" monetary scam
designed in principle in 1913 with adjustments
and advisement of assumed authority till today;
an historical relic and burden upon the
chest of man.

Thu, 10/01/2015 - 22:12 | 6619050 Groundhog Day
Groundhog Day's picture

10 to 20 more years of dollar supremacy

Thu, 10/01/2015 - 22:31 | 6619097 blindman
blindman's picture

strictly speaking, in the domain of time,
duration is a variable and not a constant,
keeping in mind that in the final analysis
it is all personal.
.
the first thing is to differentiate the
inevitable from the imminent, the world of
difference.
.
http://www.zerohedge.com/news/2015-09-28/confusing-inevitable-imminent
.
minus the storage advise it is worth reading.

Thu, 10/01/2015 - 22:15 | 6619058 cosmyccowboy
cosmyccowboy's picture

It said he built a reputation as a long term chart analyst... How old school,that sh*t don't work anymore just BTFD!!!

Thu, 10/01/2015 - 22:24 | 6619079 robnume
robnume's picture

Yeah, I'm gonna take advice from any Japanese person 'cuz they've done so well with the Japanese economy the past 30 years!

Thu, 10/01/2015 - 22:27 | 6619089 ebworthen
ebworthen's picture

I'm praying for massive, S&P 666 would be poetic.

Thu, 10/01/2015 - 23:35 | 6619263 Sorry_about_Dresden
Sorry_about_Dresden's picture

That will be greaaat!

Do I get the chance to but GS at $75/share again?

 

 

Thu, 10/01/2015 - 22:28 | 6619091 Perimetr
Perimetr's picture

Want to reinvest?

Buy a truck load of whiskey

and the three precious metals,

silver, gold, and lead . . .

Thu, 10/01/2015 - 22:49 | 6619146 zeroaccountability
zeroaccountability's picture

MMMMmmmmm, I don't know....DEEP DEFLATION...gold just doesn't do so well in that environment, I'm afraid.  I've been hoping for a drop in the silver price to pull the trigger on a monster box, but, frankly, I'm starting to get a little worried.

It's possible silver could continue its downward trend for several more years yet, into (gasp?!)  the mid to high single digits? In the long run, yes,  $100-250 per ounce...problem is, will I still be alive to enjoy my shiny?

Thu, 10/01/2015 - 22:51 | 6619150 zeroaccountability
zeroaccountability's picture

In other words, this coming collapse is going to be so severe, I don't know if ANYTHING is going to appreciate in price for years to come.

Thu, 10/01/2015 - 22:54 | 6619157 zeroaccountability
zeroaccountability's picture

Question, then:  IF we are to experience the deflation of all deflations, WHAT exactly would be the Primo Investment for such an occurrence?  (NOTE: I dunno)

Thu, 10/01/2015 - 23:06 | 6619198 Rockatanski
Rockatanski's picture

survival supplies.

Thu, 10/01/2015 - 23:10 | 6619207 ToSoft4Truth
ToSoft4Truth's picture

Look to 2008.

If you had a boatload of cash you could have snapped up properties on the cheap.

Now you’d be collecting rents and posting from Hedonism II.  

If it really gets crashy…  look to Greece.  Everyone’s cash is safe in the bank.  $50.00 a day limits.

Too much cash at home and the COPs might take it… niece’s boyfriend…  meth addicted local.  

 

Fri, 10/02/2015 - 02:03 | 6619454 jeff montanye
jeff montanye's picture

precious metals do well in deflation.  check out the performance of precious metals miners in the early to mid thirties, a time of deep deflation, up 3x to 7x.

http://www.oilngold.com/analysis/research/gold-a-gold-stocks-during-peri...

Fri, 10/02/2015 - 07:11 | 6619688 OceanX
OceanX's picture

Beer, butter and cheese?

Fri, 10/02/2015 - 09:06 | 6620084 TxExPat
TxExPat's picture

Physical anything.  Real Estate if it's not located in a tax hell hole.  Unencumbered by dept.  (dept can be very hard to service if interest rates skyrocket faster than the assets servicing that dept can increase their cash flow, not unlikely if they at least dance with hyper-inflation to break out of the deflation).  Really is hard to think of a good place to hide that is good for both deflation and a possible high inflation reaction...

Thu, 10/01/2015 - 23:07 | 6619186 moratar
moratar's picture

They are really good at delaying the collapse.

What if collapse will happen in 70 or 80 years? All that preparing might be pointless.

After all the scam keeps on going for like 100 years already. Also it is 44 years since dollar depeged from gold.

Fri, 10/02/2015 - 05:40 | 6619596 Lanka
Lanka's picture

My MREs are only good for 20 years.

Fri, 10/02/2015 - 08:13 | 6619830 RadioFlyer
RadioFlyer's picture

Hope they aren't Vietnam era...

Thu, 10/01/2015 - 23:05 | 6619192 Rockatanski
Rockatanski's picture

but someday when the rebuilding comes you might as well have something shiny. it might just be worth something. until then, i'd be stocking up on freeze dried food, water purification devices and a whole lotta ammo and train your ass off.

if it never happens at least you'll have some good stress relieve. shooting is good therapy.

Thu, 10/01/2015 - 22:56 | 6619165 SheepDog-One
SheepDog-One's picture

The harder you try to grab the Shitropes the faster you slide down.

Thu, 10/01/2015 - 23:00 | 6619179 zeroaccountability
zeroaccountability's picture

I guess, bonds with NIRP?

Keep buying shiny and hope for the best?

Option puts are out: counterparty risk.  Fuhgedabout real estate, and stawks....

Cash?  Nuh uh....QeInfinity...

So, what?

Thu, 10/01/2015 - 23:02 | 6619182 tommylicious
tommylicious's picture

Wasabi is THE MAN!!!

Thu, 10/01/2015 - 23:03 | 6619188 teslaberry
teslaberry's picture

mad dog dick nuts

Thu, 10/01/2015 - 23:06 | 6619196 zeroaccountability
zeroaccountability's picture

Granted, silver will never go to ZERO; cash, real estate, bonds, stawks all CAN go to zero. So, buy the least dirty shirt?  You're still gonna lose money, just not all of it?

And hope is not an investment strategy.  Therefore: ???????????WTF?

Thu, 10/01/2015 - 23:08 | 6619201 Questan1913
Questan1913's picture

“It’s obvious the U.S. is headed for deep deflation, hurt by the strong dollar,” said Wakabayashi, 72.“The Fed raising rates in this environment is not only ridiculous but harmful. U.S. stocks are plunging, not because of the prospect of a Fed rate hike, but to prevent it.”

 

Amazing what those HFT's are capable of....just the push of a button and the plunge is on...

Thu, 10/01/2015 - 23:31 | 6619257 fowlerja
fowlerja's picture

Wow...someone had to dig deep to find this guy..must have been a slow day for their news department...

Thu, 10/01/2015 - 23:43 | 6619277 TrustbutVerify
TrustbutVerify's picture

5 basis points

Fri, 10/02/2015 - 05:50 | 6619604 Lanka
Lanka's picture

So the FRN loses value against the Yen, and the FNR is strenthening?

Fri, 10/02/2015 - 07:38 | 6619750 Let The Wurlitz...
Let The Wurlitzer Play's picture

I agree with Wasabi with one exception. (I have been short the USD/JPY for months now)  Delefation is causing the strong dollar NOT the other way around.  Thats like sying the "tail wags the dog".

Grasshopper you have much to learn.

 

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