History never repeats, but it often rhymes. Yesterday was one of those very fascinating days in which you experience so many déjà vu moments. A few hours before #Softbank’s FY2023 results, a kitty started to roar again after more than 3 years of silence (@TheRoaringKitty), and vibes from 2021 started…
Category:Japan
DOES SOFTBANK NEED THE WEEKEND TO NEGOTIATE ITS BAILOUT?
While global investors are busily plucking daisy petals to decide between fear and #fomo, a (very) large elephant is crying out in pain in one corner of the globe. In a surreptitious move, #Softbank quietly rescheduled the release of their Financial Results for the entire 2023 fiscal year from the…
WHY UNDERSTANDING CENTRAL BANKS’ ACCOUNTING IS IMPORTANT TO UNDERSTAND THE CONSEQUENCES OF THEIR ACTIONS (ESPECIALLY THE BOJ ONES)
Yesterday, I got this interesting question that I believe the answer is worth sharing with everyone: why does the #BOJ balance sheet decrease when the #BOJ intervenes in the FX? And why doesn’t that mean there is less liquidity in the global system? Understanding central banking accounting is the key…
THIS LAST BURST OF QUANTITATIVE EASING WILL ACCELERATE THE OVERALL MONETARY IMPLOSION ALREADY UNFOLDING
Yes, quantitative easing is what just happened under everyone’s nose. The #JPY interventions of this past week effectively injected about 100 billion #USD into the global financial system that previously was not circulating. Why? Because #Japan MOF selling reserves to fetch #USD that can then be sold in the market…
EXPLAINING AND SIMPLIFYING THE JPY (COUNTERINTUITIVE) “DOOM LOOP”
Last week, I ventured a bit too deeply into the plumbing of the global financial system with the article “THE JPY (COUNTERINTUITIVE) DOOM LOOP – THE MORE JPY LOSES VALUE, THE MORE LEVERAGE IS FORCED TO COME OFFLINE, THE MORE THE JPY LOSES VALUE” and I apologize to all those…
THE JPY (COUNTERINTUITIVE) DOOM LOOP – THE MORE JPY LOSES VALUE, THE MORE LEVERAGE IS FORCED TO COME OFFLINE, THE MORE THE JPY LOSES VALUE
Almost 9 months ago now in the post “$JPY CARRY TRADE – THE BIGGEST FINANCIAL TICKING TIME BOMB OF ALL?“, I tried to explain how, in the current market conditions where the shortage of quality collateral assets is becoming incredibly scarce, a depreciating #JPY would have put the ginormous and…
NOW THAT THE JAPAN MAGIC MONEY TREE IS DEAD, EXPECT BANKS TO JUMP AT EACH OTHER’S THROATS
The answer to any problem Japan faced in the past 3 decades was “let’s just print our way out of it” and every time the global financial system was more than happy to swallow every drop of freshly printed #JPY. What were banks doing with all that money that “magically”…
HOW LONG CAN THE FED DELAY JAPAN’S (INEVITABLE) ECONOMIC IMPLOSION?
The USD dollar keeps strengthening and currently, the $DXY index is trading again above 105 or up ~0.77% in the past 5 days. What about the $USD / $JPY exchange rate? It’s only up ~0.14% while, instead, it should already be trading above 152, also considering the move in US…
WHY IS #JAPAN SO SCARED ABOUT $JPY CROSSING 152 AGAINST THE $USD?
Crossing a specific FX level isn’t usually a “big deal”. What would be the difference for a country between settling payments at 151.95 or 152.05? Intuitively, it’s quite small. However, there are 2 specific markets where a “round number” can be a very big deal: derivatives and margin lending. Why?…
WHY A HISTORICAL $JPY CURRENCY CRISIS IS AT THE DOORSTEP OF #JAPAN
Imagine you hold an asset of any type. At the moment, the asset XYZ is worth 1M$ according to the price quoted on the exchange. Now, what would be your instinctive reaction if you suddenly discovered that your asset XYZ is instead worth 100k$, but you can still go to…