Ken Rogoff Attacks ‘Crude Keynesian Stimulus”

Is the U.S. headed the way of Zimbabwe, with endless central bank monetization of the central government’s debt?

In a non-firewalled op-ed for the Financial Times, World is right to worry about US debt, which is introduced by the Op-ed editors with the sentence “America must face up to its responsibilities, writes Kenneth Rogoff”, we get [...]

EmailPrintFriendlyShare

Yen Bottom May Be In: Implications

Zero Hedge documents the end of the manufactured decline in the value of the yen vs. the USD (LINK).  This looks to be a good yen buy point, in my opinion, because a multi-year record amount of bullish positioning in the yen accompanied this decline.  One would normally expect at least a few percent reversal [...]

EmailPrintFriendlyShare

Insane People Run Japan

Insanity

n. Mental illness of such a severe nature that a person cannot distinguish fantasy from reality, cannot conduct her/his affairs due to psychosis, or is subject to uncontrollable impulsive behavior. (See here.)

The above is a legal definition as distinguished from the popular quote (misattributed to Albert Einstein), “Insanity is doing the same thing [...]

EmailPrintFriendlyShare

Record Low U.S. Birth Rate Parallels Japan

Fewer babies born per capita are pushing the U.S. toward zero population growth.  This began happening in Japan around the time it moved from an era of rising prices to one of price stability or very mild deflation, despite repeated “quantitative easing” by the Bank of Japan.  Bloomberg reports (LINK):

Recession Left Baby Bust as [...]

EmailPrintFriendlyShare

How Japanese Bonds Might Still Be a Good Investment

Periodically the blogosphere, as well as some of the MSM and academia, raise the question of how Japan’s government is going to avoid insolvency.  Federal debt exceeds 200% of GDP and continues to rise.  Until now, the solution has been for interest rates to decline, thus allowing interest costs  to stay relatively stable.  

The bogeyman [...]

EmailPrintFriendlyShare

Enemy Action in Munis

Once is happenstance. Twice is coincidence. Three times, it’s enemy action.

—Auric Goldfinger, quote from Goldfinger (1959)

Leaving aside Vallejo’s bankruptcy of a while ago, municipal bond investors have been hit with a rat a tat tat of three California municipal bankruptcies in short order.  Stockton, Mammoth Lakes, then San Bernardino.  [...]

EmailPrintFriendlyShare

Downside Market Action Continues as Malinvestments Get Revealed; Equities Bounce Would Be Normal

I want to discuss some matters using links to charts.  Sometimes showing trends on a five-year basis is helpful, because the computer’s smoothing dispenses with some of the short-term data (“noise) to reveal larger trends better.  First, the U.S. 10-year Treasury has already mapped out a low below last year’s panic low– but now there [...]

EmailPrintFriendlyShare

Japan Runs Out Of Capital

What did you think the odds were of seeing this headline when Japan was here buying up Rockefeller Center back in 1990: “In a Shift, Chinese Capital Flows to Japanese Firms.”

In late ’80s and early ’90s the Japanese were here buying large real estate projects such as Rockefeller Center and the Pebble Beach golf [...]

EmailPrintFriendlyShare

Greece In A Great Depression As Japanese Echoes Reappear In The U.S.

The unthinkable has happen in a member of the European Union and the eurozone:  an outright Great Depression.  Ekathimerini reports from Greece in an English language e-newspaper:

Greece’s stores had their worst Christmas in decades, with retail sales dropping by 30 percent compared with the same period last year as the economic crisis shattered consumer confidence, [...]

EmailPrintFriendlyShare

Japan: How Low Can You Go?

Even Japan?

Japanese government-bond prices tumbled, as foreign banks reduced assets across the board, leaving fewer buyers of Japanese debt in the market.

“What has happened is that foreign banks, aggressive buyers of JGBs, are under pressure to reduce their assets. That has put more pressure on domestic banks to bid for JGBs,” said Christian [...]

EmailPrintFriendlyShare