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Bank Of Japan Goes Full Tilt, Buys Record Amount Of ETFs And REITs To Prevent Market Crash
One can call the BOJ inefficient, slow and for the most part utterly worthless, but one can certainly not accuse them of lying, and beating around the bush. Because unlike all other central banks, with the BOJ at least it has been fully public knowledge that this particular central bank unlike all others (wink wink), is actively engaged in buying equity products, among them REITs and broad equity ETFs (which provide much explicit tail-wags-dog leverage and explains why the FRBNY's red phone hotline goes directly to Citadel's ETF trading desk). And buy stocks on full tilt and in record quantities is precisely what the BOJ just did, only as one can expect, with absolutely no impact on the broader stock market. Because once even the central bank is exposed as participating in the market, the element of surprise is gone, and the central bank becomes just one mark (if one with a largish balance sheet). As MarketWatch reports, "The Bank of Japan stepped back into the stock market Monday, making its largest single-day purchase of exchange-traded funds to date... The Japanese central bank said it spent 39.7 billion yen (about $500 million) buying up stock ETFs as part of its ongoing asset-purchase program, breaking a previous record of ¥28.5 billion, set on April 16. In addition to the ETF buys, the Bank of Japan also acquired ¥2.3 billion in real-estate investment trusts Monday." Too bad that this latest outright bull in a Japan store (sic) intervention had zero impact: "the move failed to prevent a sharp fall for the Tokyo equity market." But at least they are honest. Imagine the shock and horror (and complete lack of apologies to all those who have predicted just that) when the world finally gets a trade confirm-based proof that Brian Sack was indeed buying (never selling) SPYs and ES. Why everyone would be truly shocked, SHOCKED, that the Fed is nothing but another two-bit gambler in a rigged and broken casino.
For those who are unaware of Japan's explicit but at least forthright approach to asset price manipulation, read on:
Japan’s monetary authority is almost unique among its peers in the major developed economies, in its high-profile purchases of ETFs, which it began in December 2010 as part of aggressive easing measures.
Since then, the Bank of Japan has bought almost ¥1 trillion worth of ETFs — along with another ¥78.9 billion in REITs — and has an additional ¥642 billion to spend on the stock funds after raising the program’s size at it last policy meeting in April.
The central bank emphasizes that the program has only broad goals such as supporting interest rates and reducing risk premiums, rather than supporting financial markets.
Jefferies Japan’s head of Japanese strategy Naomi Fink says that while the ETF purchases are really part of the broad push to reflate asset prices in the deflation-plagued country, they do “provide a bit of a backstop, when they think they can curb the downside” for the market.
“Still, it’s a very small amount,” Fink said of the ETF purchases. “It’s more designed to bolster sentiment ... [and] it works best when sentiment is fragile.”
As a tangent here, do these "strategists" even listen to what they sound like? "Very small amount"... "designed to bolster sentiment." Oh ok. That makes everything so much better. It is just too bad that a Martingale strategy where one has an infinite balance sheet is not all that available to everyone in the world, except to 5 or 6 market participants of course, all of whom are incentivized to destroy their currencies and ramp their "inflation-sensitive" assets ever higher. Surely that according to Jefferies is perfectly acceptable.
Sentiment was certainly fragile Monday, as investors returned from a four-day holiday weekend to find the yen considerably stronger — a negative factor for Japan’s export-focused corporations — U.S. employment growth weaker than expected, and European election results raising more uncertainty for the euro zone.
And while investors don’t find out about the Bank of Japan’s market operations until after the close of trading, “there’s a market assumption that when the Topix falls more than 1%, that triggers ETFs,” according to Fink.
Still, Fink advised against trying to front-run the central bank by jumping into the market whenever the Topix — Japan’s key broad-market index — drops 1%.
And whatever you do kids, remember: frontrunning central banks is not to be tried at home...
“I wouldn’t exactly call that my favorite strategy,” she said, adding that since the ETF-buying program isn’t meant to be a “price-keeping operation,” it offers little in the way of trading opportunities.
... After all that's what Primary Dealers are for: and since they make sure that no bond auctions can ever fail (courtesy of the $30 trillion custodial asset cloud, which desperate economists have pegged fancy post-modernist theories to explain how infinite supply can generate infinite+1 demand without having the faintest clue of how the shadow banking system works) there naturally has to be some kickback in it for them. Because otherwise one of them might even speak up and tell the rest of the world just how much of a fraud the system truly is.
And yes, the BOJ IS completely open about what they buy and how much:
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Wow, they're actually TELLING people they're buying ETFs??
fuckushima flavored cesium hopium!
Annndd it's gone.
Don't forget, Israel is out of the closet, too.
http://www.zerohedge.com/news/next-leg-ponzi-revealed-central-banks-begin-buying-us-stocks-outright-starting-today
New Monopoly game. U can never run out of cash & the game never ends. Ages 2 to 124.
Best I can tell we pinged over and under 13000 14 times. Anyone have a better number?
If bank corporations were people their FICO score would average 240.
'In addition to the ETF buys, the Bank of Japan also acquired ¥2.3 billion in real-estate investment trusts Monday." Too bad that this latest outright bull in a Japan store (sic) intervention had zero impact: "the move failed to prevent a sharp fall for the Tokyo equity market." But at least they are honest.' -
No Tyler, they're not honest. Open yes, blatant yes, but honest, no. They didn't buy it, they claimed it, simply by saying that they had created more money they laid claim to these 'assets' and claimed them from other investors many of whom will have paid for them with real money and savings.
That's stealing, any way you look at it but legal... and it needs to be treated as such.
Keywords are always highlighted, so that we get them, even in case we miss them.
For me, in this peice....
It's what it's all about. Just like in western medicine with a long term patient, like a cancer patient. They know just how to keep the Dead Man Walking...
By the way, did folks know that the Emperor of Japan was made a member of the Order of the Garter in the 19th Century?
No wonder his family has sold the entire nation up white-man's (first Brits and them American) shit creek. Attack Russia, we are with you. Attack CHina, we are with you, go ahead, attack america after we have the good ship's out of the way.......
Same story, over and over.
The Yen is a sub-currency of the petro-dollar/dollar complex and ETF's are sub-stocks/bonds/commods.
The people of Japan obviously do not matter.
And when the carry trade un-wind begins in earnest....
ori
/the-year-the-time-and-the-place-of-our-dam-ming/
Wash, rinse, repeat.....predictable, obvious....... in-evitable?
ori
Naw. Internets are fixing it. Think about that Kony 2012 scandal. That was an agent provacatuer that burnt out on video, posted to the internet, before his handlers could pull his NGO-501c3. Much less his Yankee white/CIA clearance.
Poor innocent people avoided drone strikes 'cause of tmz.com. Now back to Pippa and her driver with a fake gun and the papparizzi.
"works best when sentiment is fragile.”
So HAL is sensitive?
Sen-tient, not Sen-sitive...
Humanity At Loss...
ori
The Kony 2012 thing reminded me more of Planet of the Apes than 2001/Terminator.
The Anglosphere and its colonies. Colonies include Japan and Germany. Now Iraq.
Look for Iraq to become the Germany of the Middle East by 2050.
" U can never run out of cash & the game never ends"
The cash runs out when every single piece of property has been securitised and or repo'ed a few times over. The printer gets all the real assets.
and there is no place in it for small investors.
How many years are you going to work to be able to buy a house from these 'funds'? This ends badly, in revolt.
There is no other way...
and you can always pass go / go to jail...
Ah, is it for non-bankers only?
But, they owe it to themselves!
If it isn't obvious that CBs plan on owning everything...
They only owe it to themselves after they buy it.
When the government needs money, it has to sell bonds.
When a central bank needs money, it creates it out of thin air. It owes NOTHING to anyone.
When a government runs a deficit, the money supply is increased by the amount they borrow.
With Quantitive Easing, the amount of money created is double the amount needed to fund the government, since money was created twice, once with the bond and once when the central bank CTRL+P to buy the bonds from the primary dealers.
I guess the BoJ still doesn't know it is about FLOW, not STOCK. They have to buy slightly more each day in order to create a sustained thrust to reach escape velocity; otherwise, they will be swirling around the toilet bowl forever. You'd think after 20 years of doing the same thing, they'd try to mix it up a little.
Hong Kong during the Asian crisis, announced that they will be buying equities, they bought, they held for a while and they sold for a profit later. Yes they got lucky then.
But now, the world markets are at a point of no return.
If you shorting or buying puts and hold overnight, not sure you gonna get paid during the collapse.
.....announced that they will be buying equities, they bought, they held for a while and they sold for a profit later. Yes they got lucky then. But now, the world markets are at a point of no return....
This is simply not true. Why does everyone have to dramatize everything so much? This is NOT the end, nor is it the point of no return. Some of you folks need to stop hiding under the mattress, and start making some supposed "worthless fiat" along with all the cronies that you're subconsciously jealous of.
The Fed is still buying/selling equities and making huge profits. The Fed just sold ~$4B worth of MAX CDO's to Barclay's and DB in April for a well-deserved profit. Their $19.5B Maiden Lane II portfolio earned $2.5B in February, and this week the Fed is selling $5B worth of AIG equity for a nice profit, too.
Your post implies that the Fed isn't able to buy equities like the Asian central banks did during the 90's crisis and turn it for a profit when, in fact, the exact opposite is true - the Fed is profiting HUGE..... today!
MF.
Dude, that is the FED. Are you saying it's a level playing field? People should go and start making money like the FED?
Too funny. You are deluded. Look at the difference in scale. Like sayign an ant and an elephant, just because they are ont he same "feild" have equal opportunities.
Totally stupid response from you MF, CM, D!
ori
Wow.
What Planet are you from?
The same alien planet Krugman is from. Earth.
That was Sweet! Good Laugh.
lol
legend comment
Central Bank of Japan will start dropping yen from Zeros & add zeros to its yen till its reached perfect nothingness like Nirvana.
Bank of Japan / Kampo? The head of the Ministry of Finance is your guy.
I like the crosses.
which will take them out first: fuckushima or financial meltdown??
I want some of that OBAMA money!
WHY are they buying ETFs?????
Because ETF is the most efficient way to buy a basket of stocks in a sector or a broad index like the S&P 500.
Bank buys SPY then SPY buys more stocks in underlying securities.
What the other guy said. But here's the problem with ETF's.
They are made of nothing.
My theory is they are created in a lab by certain methods involving unicorn kisses and virgin's tears (harvested at Comic conventions), for there a wish is made upon a star. The final touch is jamming as many shitty option packages from an industry side into that pig and hoping for the best.
Prosperity is just around the corner. Just keep waiting.
Look, I'm not a trader nor a certified financial planner; but am I to understand the BOJ is actually buying ETFs with money they are just making up? Is that correct? Because if that is what they are doing, that is ****** ******* insane!!
No it's not insane. It's another way of printing money.
Logical endpoint: use stock certificates as currency.
Eliminate the central bank midddleman.
Everybody happy. (Lots of IPOs, too -- PRINT YOUR OWN MONEY!)
O the Niaevete! The fukking FED, Presidents working group on markets,etc have been intervening for decades in stock markets, bond markets, FX, gold - thats what ZH is all about - wake the FUK up!
This corruption brings a whole new meaning to HOLY SHIT!! If THAT is not a PONZI then I don't know what is!!!
Central banks publicly state they buy stocks with the people's money to bolster sentiment. God help us. Fiat money is so over. The global developed world synchronous asset market collapse will be biblical.
So strange
When i studied macro economics the textbooks always stated that government monetization of bonds would lead to higher interest rates and monetizing stocks would lead to a lower stockmarket as everyone attempted to sell out of those markets and protect themselves with other types of asset purchases.
What did they tell you about when they monetize both stocks and bonds at the same time, or am I missing something?
I just wish it would get it over with. I'm tired of paying my mortgage.
Many are way ahead of you & are already acting like it's over when it comes to paying mortgages.
Great way to take all the chips off the table at once and then move in with the heavy artillary. Shock and awe. No escape. ATMs go down at the same time.
Inspiration time.
>>"The global developed world synchronous asset market collapse will be biblical"<<
There seems to be that possibility... and its all planned!!!
Why isnt Gold going apeshit again, oh yeah the other side of this trade.
Talk to someone now. 1-800-GA-HELPS
Anybody heard of Tres Knippa?
Shortjapandebt.com
I read that as short jap and ebt. Need to stop sniffing glue.
It's now called "muddle-through economics" coming to your central bank soon......
Maybe they buy SPY and ES and then rip them up , to compensate for the money printing. Maybe that's why there's no inflation, it all balances out!
Praise the Fraud.
a mindfuck on how much debt a nation can take on
The lights are on but the music is still playing and the bernanke is considering tapping another keg to keep people from leaving the party. "Its still early" he says the sun doesn't come up for another hour. Tell that to japan.
Doesn't this kind of thing make a tear in the fabric of space-time, or open up a wormhole? Or maybe spin off a new universe which is exactly like this one, except for the fact that the new Bernanke has horns on his head that would shame an angus steer?
At the very least, it sure has that 'standing between two mirrors, infinite-reflection' kind of vibe to it. Feels sort of like the financial equivalent of falling through an event horizon.
Thats what bernanke is hoping for. A tear in in the space-time continuem where he can transfer all the debt to an alternate universe.
Problem is, even if Ben could pull it off, the Krugmeister would sabotage the plan just enough so that the wormhole would bring an alien army through. He and Obama would fullfill their pre-emptive nobel prizes to get the aliens to finance a war we fight with them and lose, and Obama negotiates the surrender.
snarc aside, this is what you get when the entire econ and finance professions are lead by the theories of men who are the products of WW1 and WW2. (Hayek/Keynes)
No, this is only a ripple in the space-time continuum. Not a tear. Yet.
The tear, or tears, come when the BOJ liquidates its holdings by selling to itself, then transferring the "profits" to the Ministry of Finance so they can service JGBs.
In the many Universes of Central Banks, nothing from nothing IS something.
Pairadimes loved thje comment but angus typically have no horns. Pick a long-horn or plain jane herford ; )
The japanese impress me. When it coes time for japanese savers to take their bond haircut they will politely stand in line.
If anybody can pull off a genteel bank run and orderly collapse it is the japs
"The central bank emphasizes that the program has only broad goals such as supporting interest rates and reducing risk premiums, rather than supporting financial markets"
Oh, the BoJ is printing money, and using it to make sure that risk is mispriced.
Whew, that's a relief. For a minute I thought, you know, something dangerous was underway.
“The Japanese central bank said it spent 39.7 billion yen (about $500 million) buying up stock ETFs”…
“Still, it’s a very small amount,” Fink said of the ETF purchases”
WTF am I missing here?
It's not trillions or quadrillions. Hence, it's small.
It's not HIS money , thus it's small. HIS money is 100% in Quatloos.
It looks like the bank of Japan and Fukushima will outdo Hiroshima and Nagasaki, only this time these two new bombs will take the world with them.
Thats how they have been planning their revenge all these years. Saying fuck you to the west without a single weapon.
Sort of, but most eastern martial arts like Judo emphasize using your opponents' agression/momentum against them.
I am loving it (TM) G.E.'s current public relations campaign. Since most of the WW2 vets and nostalgia are passing, they are going back to the tried and true. Can't really use the unconstituional wars (korea,nam, MENA) to do the corp-to-peasant advertizing. So they got railroad workers watching their "unit" on a mountain coastline with a welder talking about how he built the locomotive.
How about having a big budget advert with Jeff Immelt rallying his 6,000+ tax avoidance employees to fix reactor #4?
Simply stated:
Capitalism is but a word with a definition, rather than a practicing economic or political culture.
Among other revelations, one of the central reasons that Ron Paul and others have been pushing for a full Fed audit is to finally prove what has been widely rumored and suspected for many years - that the FRBNY, like the BOJ, has been propping up U.S. equity markets for years through proxy buying accounts at JPMorgan Chase and a few other trusted institutions.
Think of the advantages that an extremely small number of insiders have had knowing when the Fed is buying, kind of like having day after day of trading with no losses . . . .
For those of us who traded daily or more frequently during the 2008 melt down it was glaringly obvious that some entity or entities with significant balance sheets were the bid when no one else was buying.
That was when I internalized the fact that the market was manipulated by large forces.
I think Ben is turning Japanese, I think he's turning Japanese, I really think so...
I think Ben has been Japanese for a long time!
We are all Japan now
To invest in this stock market, long or short, one essentially must obtain inside information as to what the central bank will do, and when. Or simply guess. I am almost reduced to profanity.
No need to guess. Central Banks will protect, serve, and bail out the big merchant banks, whatever it takes, no matter the consequences.
That's all you need to know. Where traders go wrong is that they seriously underestimate the extremes to which Central Banks are prepared to act.
Traders think "nah, they won't go that far, surely". And then their accounts blow up, while Wall St and the City laugh like rabid hyenas.
+1 absolutely 100% correct, never ever underestimate the lengths to which the Central Banks will go to keep the Ponzi alive
the only way to trade now is to understand what their objectives are and to assume that there is no corruption that they will not employ - in their world the ends absolutely justifies the means
The central banks will never travel in a "straight line". Even if you "discern" their true motives, they will veer off course a random times just to shake you off and put doubt in your mind.
Yes, but they are not doing it only for the big merchant banks. They're doing it for the S&P 500. Buying and selling. Every day. This situation is impossible for any investor without inside information. At some point the central banks will be the only traders.
I'm Melting! - The Wizard of Oz (7/8) Movie CLIP (1939) HD
http://www.youtube.com/watch?v=aopdD9Cu-So
When the Fed officially enters the US markets, it will start by shorting precious metals ETFs and buying Goldman Sachs and J P Morgan.
joke
Alright... There's this guy at a urinal, and he's chillin in the urinal there, and he looks around and sees another guy walking toward the urinal-- with no arms. And he thinks to himself, "Whoa." And as he's observing this armless guy struttin towards the urinal, and the guy says, "Hey pal could you help me out here and and unzip my pants for me please." And the first guy thinks, "Oh I don't really want to but I feel sorry for the him, so OK." --and he unzips his pants. And then the armless guy is like, "Please pull it out for me." And the first guy's like-- he really doesn't want to but, again he feels sorry for the guy so he whips it out. And while the two of them are peein, the first guy smells this foul smell... and he looks down and sees all these scars and boils and hideous lesions and he can't help himself, he says, "What the fuck is up with that shit?" Then the armless guy pops his arms out of his jacket, zips up and says, "I don't know but I ain't touching that fucked up shit."
Our markets are now completely and totally about frontrunning, frontrunning orders, economic data, etc., etc., etc.
Not that we didn't have frontrunning in the past, we certainly did.
But the scale of frontrunning that now exists via the algos and the government connected dwarfs anything that we have seen in the past and amazingly it still seems to be growing
and the main stream media wonders why retail investors are still abandoning the equity markets in droves, because in their gut they know that something is wrong, corruption is rampant, MFG was a confirmation
Et Tu, Fukushima?
I caught it. Compliments of Bloomberg; BOJ Tells Fed Credit Rules May Hinder Japan Monetary Policy - Bloomberg
Just go full retard already and buy the whole friggen market. Surely in keynesian logic that will keep the market from crashing.
Once again proving that the power to create money out of thin air is a power too great for men to possess. It is absolute power, and thus absolutely corrupt. When the history books are written, and they look back on these days, they will say "look at what these fools did, haha we will never do that again". Oh wait, isn't that what we say about the Romans right now? Some things never change. It's easy to say we would be different if we had the power, but honestly we are so far down the road that turning off the printer now is going to be like walking off a cliff. Easy to say, harder to do.
Agreed. Money is as addictive as any other drug. Get the patient hooked for 50 years, pull the IV out of the patient, cold turkey style, and see what happens.
At least the French have started to figure that out. May be too late for the Greeks.
Since 2008, the US federal deficit has increased by about $800B per year, or about 5% of the GDP. Just to get back to the already-fatal trajectory we had been on, we will have to take a major recession without any stimulus (other than QE, cause QE is free). As you said, it is hard to walk off a cliff.
Agreed. Money is as addictive as any other drug. Get the patient hooked for 50 years, pull the IV out of the patient, cold turkey style, and see what happens.
At least the French have started to figure that out. May be too late for the Greeks.
Since 2008, the US federal deficit has increased by about $800B per year, or about 5% of the GDP. Just to get back to the already-fatal trajectory we had been on, we will have to take a major recession without any stimulus (other than QE, cause QE is free). As you said, it is hard to walk off a cliff.
The central bank emphasizes that the program has only broad goals such as supporting interest rates and reducing risk premiums, rather than supporting financial markets.
reducing risk premiums = supporting financial markets, no?
So, are these bankers so fucking stupid that they don't actually know what they are doing, or do they actually think we are just stupud enough to not understand what's going on here?
They know about 10% of us get it. But they also no the other 90% are too lazy to try and understand what they are doing and why it's bad.
You really think it's as high as 10%? More people can name the Kardashian sisters and the men they've married than essential people in government. (I use the word "essential" lightly.) I put the percentage lower.
It's the why it's bad part that stumps people. All they hear is that their retirement portfolio number hasn't crashed. Brain says all is good and turns off.
I would definitely say the latter and would be mostly correct.
I'm thinking the BoJ isn't real happy with SWAP,s terms! Europe has been get their cake , and eating it to!
Japan gave a favorable swaps agreement to China in April, and the boys in Washington aren't real happy!
Too bad Japan holds just under 1-T of U.S. debt!
Interestingly, I'm pretty sure BOJ could cash every bond, which would be interesting in and of itself, convert to Yen, and only be able to pay off about 8% of its debt.
That's not the point! It's perceived value. <> Japan was toast when the yen crossed to 100 usd/¥ barrier!
Gotta love the Fed?
Korea, is Japan 10-20 years from now. Cars , T.V's and NATO protection!
Crap, I broke my own cardinal rule against replying to Yen Cross.
I'm DEvIStated.
More cotton candy; when does the Fair end?
No Nikkei/KOSPI 200 put sales? Forgive me if I fail to acknowledge forthrightness.
Why don't they just tell us what the prices are? Maybe write it on a sign or something.
Watch out Bernanke is getting jealous with all this printing.
The Japanese are good at making paper houses. One problem is that they burn very easily.
I caught this, in one of my Bank reads today. I thought you ( Z/H' ers) would get a good laugh.
Our New Facebook Grey Market I shit you not!
the only reason I posted , was because it's a slap in the face of American Markets & Hedging ( derivitives/currencies)!
The CFTC needs to re-open ( CFD) trading in The United States! ETF trading is just another option!
XAU/XAG/ currency markets need more LIQUIDITY!
The Bernank is gambling with my mother's prescription drug money. If that isn't a crime what is?
are we there yet?
japan is just really in a holding pattern - simply trying to hold out for other dominoes to fall first.
Range Trading:
http://capital3x.com/think-tank/return-to-range/
Long equities, short gold.
Central Banks' winning trade, until it isn't.
Is there any wonder retail investors are leaving the stock market in droves?
The BOJ was very succesful. Markets recovered. Gold is falling. Japan is doing well. Central banks rule the world. What's wrong with that picture?
ITS FUKCING OVER
SAY BUH BUYE JAPAN
PLAZA ACCORDS???
FUCK YOU JAPAN BEND THE FUCK OVER
GET IT DONE WITH
http://en.wikipedia.org/wiki/Plaza_Accord
SHADOW SHOGUNS
http://www.tandfonline.com/doi/abs/10.1080/01636609809550317
ZH will probably ignore gold again today as it is falling faster than the euro now.
In Asia whenever there is too much negative influence affecting the markets it is expected for the government to step in and make purchases. Of course they usually only buy blue chip stock.
Story on the wires that Japan is warning France to "stay the course" with austerity.
Funny.
Asian charts look bad. So the government is buying into a weak market in Japan - should read governments are buying into their weak markets around the world.
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