http://www.zerohedge.com/news/2013-05-30/here-are-holdings-japanese-public-pension-fund
Here Are The Holdings Of The Japanese Public Pension Fund
The story of the past hour: and the catalyst for the nearly 100 pip move in the USDJPY and the 10 move in ES was the "unsourced" Reuters article that is merely a regurgitation of a Bloomberg story from February 2013: "Japan Pension Fund Has Too Many Bonds on Abe Plan", which said that, quoting verbatim, "Japan’s public pension fund, the world’s biggest manager of retirement savings, is considering the first change to its asset balance as a new government’s policies could erode the value of $747 billion in local bonds." Or what Reuters just reported in an "exclusive." In other words, not only is the Reuters story without validation, it is four months old! And while the idiotic move resulting from this planted puff piece will be promptly faded, after all it simply says that the Government Pension Investment Fund (GPIF) will keep the current allocation of investments and not add to stocks, it brings up an interesting question: just what is the asset distribution of the GPIF?
Presenting the key assets JPY108 trillion ($1.16 trillion) GPIF pension fund as of September 2012:
- JPY 68.3 trillion in government bonds:64%
- JPY 12.6 trillion in foreign stocks: 12%
- JPY 12 trillion in Japanese stocks: 11%
- JPY 9.6 trillion in foreign bonds: 9%
In other words, the fact that the GPIF's overall domestic equity allocation will not decline from 11%, or a little over $100 billion, is the main catalyst for today's move.
Putting $100 billion in context: this is how much liquidity the BOJ injects in the stock market in under two months.
And this is why having algos and Mrs Watanabe's FX stops deciding the level of the global market is not a good idea.
and...
http://www.zerohedge.com/news/2013-05-30/nikkei-plunges-another-5-unsourced-stick-save-arrives-just-time
Nikkei Plunges Another 5% But "Unsourced" Stick Save Arrives Just In Time
Submitted by Tyler Durden on 05/30/2013 - 06:55
One look at the 5%+ plunge in the Nikkei overnight and one would be allowed to wonder if this was it for Abenomics: with a 15% drop from recent highs, and the TOPIX Real Estate index down by more than 20%+ since mid-April, entering a bear market, what's worse is that even the "wealth effect" Mrs Watanabe fanatics would be excused from having much hope going forward. The problem, however, is that in a world in whichonly the USDJPY matters as a risk signal, andonly the stock market remains as a last bastion of "hope", the overnight weakness pushing the dollar yen to just 50 pips above 100 threatened to crush the manipulated rally and force everyone to doubt the sustainability of central planning. So, sure enough, literally seconds we got the much needed stick save without which everything could have come tumbling down, namely based on an unsourced article out of Reuters that Japan's Public Pension Fund is considering a change to its portfolio strategy that could allow domestic equity share of investments to rise in rallying market. The immediate result was an instantaneous surge in the USDJPY which in turn dragged global risk higher across the board, simply due to what algos deemed as yet another procyclical last minute rescue. More importantly this was nothing but a squeeze catalyst coming at just the right time before market open to prevent a rout in global equities. Ironically, that we are back to the Reuters "sticksave" unsourced article, indicates just how weak the reality behind the scenes must be.http://ransquawk.com/headlines/japanese-finance-minister-aso-says-rise-in-yields-may-be-negative-for-lenders-30-05-2013
( Did Finance Minister Aso just tell japanese lenders to sell JGBs ? )
Japanese finance minister Aso says rise in yields may be negative for lenders
Says:
- Banks responsible for managing risks of their investment portfolios.
- Banks responsible for managing risks of their investment portfolios.
http://www.zerohedge.com/news/2013-05-29/japanese-stocks-open-down-3-yen-spikes-bonds-greatly-unrotated
Japanese Stocks Open Down 3%, Yen Spikes, Bonds Greatly Unrotated
...And cue Amari, Kuroda, or Abe proclaiming that it's all under control. Japanese stocks (the broader TOPIX index) are now down 3% with financials and utilities getting monkey-hammered. JPY is surging back under the Maginot line of 101.00 to its strongest since the big-break-of 100.00 day three weeks ago. JGBs are rallying (so that's one thing) but are half-way to being halted limit-up. But - with the rally in JGBs, hedgers are scrambling to protect gains as JGB implied vol surges back over 48% (its highest in over a month). So, apart from that...
If Volcker panned Bernake's QE schemes , what would he say about Japan ?
Volcker On Bernanke's Grand Monetary Experiment: "Good Luck In That"
A week ago, in a very comic interlude, the hawkish head of the only G-7 country to have experienced hyperinflation in the recent past - Bundesbank's Jens Weidmann - had some sobering words of encouragement for his Japanese colleague Kuroda: "I wish them luck in their experiments."
Now, another former central bank head, the most famous one of the 1980s, and the man thanks to whom America did not implode in a depressionary puff of runaway inflation, Greenspan's predecessor Paul Volcker, has taken the podium and made a mockery of the entire fallback premise on which Bernanke's house of manipulated, centrally-planned cards is built: his assumption that no matter how much deferred inflation is injected, that Bernanke needs just "15 minutes" to take it away. Better yet, and as Japan has recently seen: the fact that central bank credibility is slowly but surely starting to slip away - first visible in rapid rises in bond yields, then in a surge in bond volatility, and finally: an all out inflationary conflagration.
“The Federal Reserve, any central bank, should not be asked to do too much to undertake responsibilities that it cannot responsibly meet with its appropriately limited powers,” Volcker said. He said a central bank’s basic responsibility is for a “stable currency.”“Credibility is an enormous asset,” Volcker said. “Once earned, it must not be frittered away by yielding to the notion that a little inflation right now is a good a thing, a good thing to release animal spirits and to pep up investment.”“The implicit assumption behind that siren call must be that the inflation rate can be manipulated to reach economic objectives,” according to Volcker. “Up today, maybe a little more tomorrow and then pulled back on command.Good luck in that. All experience demonstrates that inflation, when fairly and deliberately started, is hard to control and reverse.”
Hopefully Volcker can be cryogenically frozen because when the Chairsatan eventually - and it is only a matter of time - loses control and all hell breaks lose, none of the muppets in the Marriner Eccles building, no click-baiting Nobel-winning trolling Op-Ed writer with socialist delusions of grandure, will have any idea what to do, and it will be someone like Paul who will be needed to unleash his magic once more. Sadly, we have the sinking suspiction that not even thawed out of carbonite, will Volcker have any success when faced with the Frankenstein monster that the MIT central-banking braintrust have managed to unleash.
No comments:
Post a Comment