Japan

Frontrunning: June 20

  • Britain's rival EU camps resume campaign as polls show momentum for 'In' (Reuters)
  • Britain's 'In' campaign wins more support, buoys markets (Reuters)
  • Brexit Campaigners Are Deceiving Voters, Cameron Says (BBG)
  • German trade body lowers export forecast: 'Brexit is poison' (Reuters)
  • Beyond the Turmoil, Central Bankers Dread Brexit’s Shadow (BBG)

Global Stocks Soar, Pound Surges Most Since 2008 As Brexit Odds Tumble

Global equities rallied and the pound strengthened the most since 2008, soaring by 300 pips since the Friday close as polls signaled the campaign for the U.K to stay in the European Union was gaining momentum. Haven assets including the yen, U.S. Treasuries and gold slumped. The Stoxx Europe 600 Index surged by the most since February as the MSCI Asia Pacific Index advanced with S&P 500 futures.  Haven assets including the yen, U.S. Treasuries and gold slumped.

Japanese Finance Minister Reminds Elderly "Hurry Up & Die"

Everyone knows that Japan, whose population is now declining for the first time in its history, sold more adult than baby diapers for the first time in 2012, and is "older" than any nation in the world, has a "demographic problem." What few may know, however, is that it also has a secret plan to fix said "demographic problem" - a solution that would make Hitler, Goebbels and Stalin proud.

The Economy Is Not What It Seems

The last two-quarters of economic growth have been less than exciting, to say the least. However, these rather dismal quarters of growth come at a time when oil prices and gasoline prices have plummeted AND amidst one of the warmest winters in 65-plus years. Why is that important? Because falling oil and gas prices and warm weather are effective “tax credits” to consumers as they spend less on gasoline, heating oil and electricity. Combined, these “savings” account for more than $200 billion in additional spending power for the consumer. So, personal consumption expenditures should be rising, right?

Mrs.Watanabe Defies The BOJ Once Again While Betting On Robots

As the BOJ continues to load up on Nikkei ETFs in hopes that the rest of the market will be faked out and buy Japanese equities, Mrs. Watanabe continues to be a nemesis. In addition to being in the market for DM government bonds, Japanese investors are also piling into Nikko Asset Management's Global Robotics Equity Fund, which would be fine with the BOJ, except that only a third of the fund is allocated to Japanese equitites.

Noam Chomsky On The Breakdown Of American Society & A World In Transition

The US is facing uncertain times. While it remains the only global superpower, it is no longer able to influence events and outcomes to its liking, at least not for the most part. Frustration and worry about the risk of upcoming disasters seem to far outweigh US voters' hopes for a more rational and just world order. Meanwhile, Noam Chomsky argues, the rise and popularity of Donald Trump is occurring due to the fact that US society is breaking down. In this exclusive interview with Truthout, Noam Chomsky addresses contemporary developments in both the United States and around the world and challenges prevailing views about class warfare, neoliberalism as the outcome of economic laws, the role of the US as a global power, the status of emerging economies and the power of the Israel Lobby.

Is Another Financial Crisis Coming: This Chart May Have The Answer

There is one chart that shows that underneath the placid surface of the S&P not all is well. The chart is the following, and demonstrates the substantial recent selloff in US bank stocks, which have been a near-flawless 'canary in the coalmine' ahead of major market inflection points, and which have successfully predicted most major crashes inthe past several decades. 

"Renormalization" Is Dead: The Market Is Pricing Just One Rate Hike Over Next 3 Years

Rates shock: market now pricing only one Fed hike over next 3 years. As bond yields in Europe and Japan hit new historical lows this week, the US 10y yield fell to a 4-year low, just 20bps above its 2012 historical lows. This followed a weak payrolls report, Brexit uncertainty, the beginning of the ECB’s corporate bond buying program and a very dovish June FOMC meeting which significantly cut rate forecasts in the out years. 

This Is What The Coming "Bond Shock" Will Look Like

The only thing that can halt the tsunami of bond buying, would be a Bond Shock, an event that is certain to take place, the only question is when. As BofA points out, the relentless chasing after government paper will change "if Quantitative Failure spreads from Europe & Japan to the US."  Here's how to time it and what it would look like.

Japan: A Future Of Stagnation

Take a declining population with declining rates of productivity growth and load it up with debt, and you get a triple-whammy recipe for permanent stagnation. There are Degrowth strategies that make sense because they're designed to be sustainable, but first the systems that have been designed to fail - Keynesian stimulus policies and the banking system - must be allowed to fail.