Japan Bank to Overhaul Investments as Wrong-Way Rate Bets Trigger Bond Losses \ stacker news ~econ

Japan Bank to Overhaul Investments as Wrong-Way Rate Bets Trigger Bond Losses finance.yahoo.com/news/norinchukin-eyes-assets-including-clos-014942422.html

1642 sats \ 21 comments \ @siggy47 19 Jun econ

While Japanese regulators haven’t expressed concerns about the financial stability of Norinchukin or other big financial firms, the disclosures have raised questions about potential losses lurking elsewhere in the nation’s banking system.

When have I heard this before? I wonder if this is the first domino?

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97 sats \ 1 reply \ @0xbitcoiner 19 Jun

While 63B$ sounds like a lot, I believe the markets will absorb it without much trouble. What leads me to think this way? The sale will be done gradually, and if central banks need to intervene, they are there. I do not underestimate the power of central banks to print money.

48 sats \ 0 replies \ @siggy47 OP 19 Jun

No doubt. I don't think that's the concern. This is a really big bank, with lots of assets. How many smaller banks are in the same situation? We saw the start of it last year. Those safe US bonds aren't so far at these interest rates.

59 sats \ 1 reply \ @Kontext 19 Jun

Just watching George Gammon cover this. Great extra insights:

10 sats \ 0 replies \ @siggy47 OP 19 Jun

Thanks for posting this. I'm interested to hear what he thinks.

87 sats \ 6 replies \ @Satosora 19 Jun

@siggy47 you are being so gloomy. Its only one big financial firm....

53 sats \ 4 replies \ @siggy47 OP 19 Jun

I hope so.

54 sats \ 3 replies \ @Satosora 19 Jun

But one big firm in china seemed to topple the real estate market... Remember Evergreen?

30 sats \ 2 replies \ @siggy47 OP 19 Jun

Evergrande is still a mess.

54 sats \ 1 reply \ @Satosora 19 Jun

Huge mess. And then it trickled down, and made things worse.

0 sats \ 0 replies \ @Satosora 19 Jun

Then right after that, the eva green ship got stuck in the harbour. I thought that was a funny coincidence.

0 sats \ 0 replies \ @blocktock 19 Jun

Watch the Nikkei these next few weeks & months. It could well spread.

There's an anime called Jujutsu Kaisen (S2, E46) that has laid out a semi-fictional story on events. Predictive programming perhaps, given it's popularity in Japan. It mentions with detail that Japan is the first sign of cracks worldwide, showing in detail with charts the Nikkei to drop to 26,000. Currently the Nikkei is 38,403 so that would be ~40% drop in all equities there.

In such a scenario inflation of the Yen will accelerate as this spreads, which will prompt the Bank of Japan to sell even more U.S Treasury bills to defend their currency. That will in turn cause the Federal Reserve to start printing more dollars to buy back U.S T-Bills to defend the US dollar. This may cause in-fighting between countries to get more prevalent. And therefore we may see some distractions to mask all of this. Japan may be about to drag all other developed nations down with them.

87 sats \ 1 reply \ @SatsMate 19 Jun

I feel like Japan's central bank has been struggling for like 6-7 months now. How long can they stave this off? Can't they perpetually do yield curve control and manipulate the markets?

0 sats \ 0 replies \ @gmd 19 Jun

USD/Yen back @ 158 :'(

55 sats \ 2 replies \ @grayruby 19 Jun

The interventions will not stop and will only grow in magnitude.

What's interesting is how long Japan has been able to kick the can down the road with insane debt levels, rates near zero and the central bank owning practically everything and is this model sustainable when adopted by every developed nation?

51 sats \ 1 reply \ @siggy47 OP 19 Jun

That's a real puzzle to me. They have been a zombie economy since the 90s, yet the average person enjoyed a solid standard of living.

54 sats \ 0 replies \ @grayruby 19 Jun

I think it is feasible for one large economy to run this playbook. I don't think they can all do it at once but we are going to find out.

54 sats \ 0 replies \ @riberet19 19 Jun

I hope this is not the beginning of something worse, Japan's economy is not in a good moment and this could only make the outlook worse

54 sats \ 2 replies \ @Coinsreporter 19 Jun

$63 B is hugeee! I've ner heard it before.

22 sats \ 1 reply \ @siggy47 OP 19 Jun

This reminds me of the start of the mess in 2008.

0 sats \ 0 replies \ @Coinsreporter 19 Jun

It may very well be the beginning of another 2008 type of a message. Just wonder if it's limited to one bank or other banks are also experiencing the same loses ..

0 sats \ 0 replies \ @Satosora 19 Jun

They better get it before it falls!