Jim’s Mailbox
Posted July 7th, 2017 at 8:16 PM (CST) by Jim Sinclair & filed under Jim's Mailbox.
Jim/Bill,
It’s what Central Banks do….print unlimited fiat currency and buy back their own paper which the markets no longer want.
“With The Fed in full ‘taper’ mode and The ECB hinting, the world is left to rely on Kuroda to single-handedly buy-the-dip in stocks and maintain bond yields at the mandated level.”
Who needs the markets anymore when central banks buy back their own paper?
Nobody.
Who needs gold as protection from this fiscal malfeasance?
Everyone!
CIGA Wolfgang Rech
Japanese Equity Market Outflows Spike To 8 Year High
July 7, 2017
With The Fed is full ‘taper’ mode and The ECB hinting, the world is left to rely on Kuroda to single-handedly buy-the-dip in stocks and maintain bond yields at the mandated level. With Japanese stocks fading in the last two weeks (as bond yields spike), it appears the ubiquitous ‘hand of god’ has disappeared…
And judging by the biggest Japanese equity fund outflows in 8 years, the fear is spreading…
More…
Panicked BOJ Unleashes Bond Buying Bazooka: Offers To Buy Unlimited 10Y JGBs At 0.11%
July 6, 2017
During this morning’s bond rout when a poor French auction sparked a high-volume selloff in German Bunds which also hit Japanese JGBs before slamming US TSYs, Goldman said that “with 10Y JGBs closing at 0.095 and getting hit at 10bp intraday, focus will be on how the BOJ will react tomorrow [i.e. now]. Opinions seem pretty split with some expecting an increase in purchase size in the 5-10 bucket, while others feel that the BOJ will let the 10Y run loose given the current sell off is more fundamental than event driven. With BOJ behind buying pace for 80tn reference anyway, personally I feel it doesn’t hurt the BOJ to remind market of their presence.”
Goldman was right: the BOJ, panicking after the overnight bond rout, not only reminded markets of its presence, but did so in dramatic fashion when it first boosted the amount of JGBs bought in the 5-10 year bucket from JPY 450BN to JPY 500 BN, and then for good measure unleashed the QQEWYC bazooka, announcing it would purchase an unlimited amount of 10Y JGBs at 0.11%, just a fraction above the BOJ’s 0.10% line in the sand, only the second time it has done so in 2017 since February.
In immediate reaction, the benchmark Japanese TSY, which was trading north of 0.105% and flirting with 0.11%, promptly slid back to 0.095% now that it has become clear that all the hawkish posturing by central banks was just that.
More…
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Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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