"There's nothing to hold on to when gravity betrays you
When after all the urges some kind of truth emerges
We felt the deadly surges
Discovering Japan" – Graham Parker
Despite the best efforts of the BOJ, Japanese 10-year note rates are rising at an alarming, er, rate.
A four-day rout pushed 10-year yields to within three basis points of turning positive on Tuesday for the first time since March, after Bank of Japan policy makers disappointed investors last week by leaving bond buying and their negative deposit rate unchanged even as they increased exchange-traded-fund purchases. Pacific Investment Management Co. and former Ministry of Finance official Eisuke Sakakibara both say central bank Governor Haruhiko Kuroda is running out of room to expand stimulus.
“The selling is insane,” Satoshi Shimamura, head of rates and markets for the investment strategy department of MassMutual Life Insurance in Tokyo, said Tuesday. “The market is picturing an end to Kuroda easing. There’s no telling how far this will go.”
How fast can Japan fall apart? Well, let's look at another BS currency that got overinflated as money flowed into risky assets searching yield: Bitcoin plunged 30% since June and 20% of that is this week as $65M "worth" of BitCoins (119,756) were "stolen" from Hong Kong's Bitfinex, who have now halted all trading, deposits and withdrawals.
It will be fun to see how this one plays out, hopefully not another Mt Gox incident. That one involved 850,000 Bitcoins "valued" at $450M back in Feb of 2014 – Mt. Gox ended up liquidating in April 2014 and, since then, Bitfinex has become the World's largest exchange – supposedly with better security.
Where oh where can we safely put our money these days? Even the banks are looking dubious – perhaps we should invest in safe companies and then invest in someone who makes burglary tools for good measure! Speaking of banks, yesterday FAZ trade got off to a great start and our WFC hedge held $47 for the day, so a good-looking trade all around.