In a stunning turn of events, a Japanese Ministry of Finance official admits to Richard Koo's worst nightmare "Japan is fiscally worse than Greece". Bloomberg is reporting that, at a conference in Tokyo, Yasushi Kinoshita says Japan's 2011 fiscal deficit was up to 10% of GDP and its debt-to-GDP has soared to over 230%. What is more concerning is the Kyle-Bass- / Hugh-Hendry-recognized concentration risk that Kinoshita admits to also - with a large amount of JGBs held domestically, the Japanese financial system is much more vulnerable to fiscal shocks (cough energy price cough) than Europe. Of course, the market is catatonic in its reaction to this - mesmerized by the possibility of buybacks and hypnotized at big-banks-passing-stress-tests - though we do note the small reverse stronger in USDJPY has reversed as this news broke and the USD pushes modestly higher.
Now why in the world would this government wonk admit this in public? This will only cause the bond market to worry and perhaps the flight of foreign capital!
The yen dropped by the most in three years against the dollar as Japan stepped into foreign-exchange markets to weaken the currency for the third time this year after its gains to a postwar record threatened exporters.
“I’ve repeatedly said that we’ll take bold action against speculative moves in the market,” Japanese Finance Minister Jun Azumi told reporters today after the government acted unilaterally. “I’ll continue to intervene until I am satisfied.”
The yen weakened against the more than 150 currencies that Bloomberg tracks as Azumi said he ordered the intervention at 10:25 a.m. local time because “speculative moves” in the currency failed to reflect Japan’s economic fundamentals. Today’s drop reversed this month’s previous gain by the yen against the greenback amid speculation the Federal Reserve may add to stimulus measures as the U.S. recovery stagnates.
The Japanese currency sank 4.3 percent as of 6:44 a.m. in London to 79.24 per dollar, after remaining at 79.20 for almost three hours. The yen headed for its biggest closing drop since October 2008. It fell to as low as 79.53 per dollar, the weakest since Aug. 4.
Seriously, these people are nuts. These fools keep doing this but it never works. They throw away billions, the yen falls for a short while, then it starts to rise again. Please refer to: Insanity: Japanese Government of August 9, 2011:
I write over and over until my fingers are bleeding that the government is run by idiots. For over twenty years, the clowns "at the helm" of the Japanese government have been creating debt and trying to manipulate the markets. We have the current situation to show for it: Massive public debt and an economy mired in the mud.
Last year's currency intervention was to stop the yen when it was at about ¥82 to the US dollar. The Japanese Central Bank threw $63 billion dollars at the problem then.
FIVE DAYS ago, the yen and dollar rate was ¥76.9 yen to one US dollar. The Japanese government threw $56 billion dollars at that. They were patting themselves on the back because the yen quickly shot past ¥80 to the US dollar. That was on August 4, 2011.
This is the third currency intervention by Japan this year. How many times do these idiots have to keep repeating the same mistake until they learn that these sorts of interventions never work?
Let me predict that we will see ¥75 to the US Dollar again before Feb. 2012... Soon followed by another massive currency intervention.
The last intervention was $60 billion dollars down the trash can. This newest one, with the biggest rise in the yen since 1978, must be well more than that! Japanese government debt is now 225% of GDP. Is it any wonder with the government so stupidly throwing money down the toilet over and over?
Everyday, first thing I do when I wake up is to turn on my computer and check the stock market and the yen vs. dollar rate.
For this last week or so, the yen has been hovering around ¥76.8 yen to $1 US dollar. Every time the yen has gotten strong, until now, the Japanese government has thrown massive amounts of money away in vain attempts at intervening to stop the yen's rise. And every time they've done this they have failed, yet they keep doing it over and over.
They intervened in the yen at ¥76.9, spending some $50 billion dollars. The yen rose to over ¥80 to the US dollar. Now, today, exactly one week later, we're right back where we started. The yen today, as of 4:11 am August 11, 2011 Japan time, is at ¥76.81...
Now they are considering doing this again!? What is wrong with these stupid people?
Since, at that time, the Japan Central Bank (JCB) claimed it was "watching the market and would act accordingly" I have been expecting to see the yen jump back to ¥80 to $1 US Dollar over this past week or so.
It hasn't happened.
Now, Bloomberg says that some clown nick named, "Mr. Yen" (a former finance minister says the yen could hit ¥75 to $1 US Dollar soon.
Japan’s currency may strengthen to a postwar high against the dollar because of the weakness of the U.S. economy, said former Finance Ministry official Eisuke Sakakibara, who’s known as “Mr. Yen.”
“The yen may appreciate further, beyond 75,” Sakakibara said in an interview from Tokyo on Bloomberg Television today. “I would expect the U.S. economy to be fairly weak for a long period of time.”
The yen declined today after Finance Minister Yoshihiko Noda warned that he’s ready to intervene again to stem gains that pose a risk to exports. On Aug. 4, the government sold the currency to stem gains that threaten exporters’ profits. The yen has since returned to its pre-intervention level and is approaching its all-time high of 76.25, underscoring the difficulty authorities are having in halting its advance.
“Intervention, in order to be effective, needs to be persistent and continuous and needs to have the understanding” of other authorities, said Sakakibara, who earned the nickname because of his efforts when an official to influence the yen rate through verbal and actual intervention in currency markets. “Multilateral intervention does work but I don’t think at the moment the U.S. is willing to intervene. It will be very difficult to have a coordinated intervention.”
He says, “Intervention, in order to be effective, needs to be persistent and continuous and needs to have the understanding” of other authorities...!? Now do you understand why I call this guy a clown? When has intervention ever been effective for more than a few weeks?
In 1996, the average yen to dollar rate was about 106 yen to $1 USD.
Today it is ¥76.82 per $1 USD - about a 30% increase in the yen. I suppose this says volumes about how effective these interventions to weaken the yen have been.
I'm sure we will hit ¥75 to $1 US Dollar... The question is how many more interventions and wasted tax monies do the Japanese public have to suffer before that happens?
We're F'ed. There, I said it. I used the "F" word.
What did I tell you? Exactly one week ago, I complained that those stupid idiots (I do have harsher words but this is a "family fun" blog) in the Japanese government threw away $50 some billion dollars trying to support the rising yen. In Japanese Central Bank Throws Away a Billion Dollars Again, I wrote:
This morning when I woke up I checked the financial markets, gold, silver and, of course, the dollar yen rate.
I was somewhat surprised to see the yen at ¥76.9-something to the US dollar. A hour or two later, the yen had dropped to its current ¥78.9 per US dollar. Obviously the Japanese Central Bank intervened and bought a bunch of dollars.
Fools. When will they ever learn? They keep throwing our hard earned tax money down the drain to stop the yen's rise, but it is all in vain as the yen's appreciation continues....
Why do these fools keep doing this? When will they ever learn that these interventions cannot and will not stop any long term trend?
Gee, you think that, after decades of this sort of failed action repeated over and over that these analysts would figure it out? Gee... I guess they really go out on a limb and stick their necks out when they make statements like, "We don't believe today's action will explicity change the trend."
What!? After decades of this sort of action and the inevitable failures of those actions, why is it difficult to say straight out that "this Bank of Japan intervention will fail like all the others have before it."
They intervened in the yen at ¥76.9, spending some $50 billion dollars. The yen rose to over ¥80 to the US dollar. Now, today, exactly one week later, we're right back where we started. The yen today, as of 4:11 am August 11, 2011 Japan time, is at ¥76.81...
Those fricking jerks in the government just threw away, for the umpteenth time, $50 billion dollars of hard earned tax payer money. That's your money and my money! God!@%>?! idiots!
Now they are considering doing this again!? What the f*ck is wrong with these stupid people?
Japanese policymakers voiced growing alarm on Tuesday as the yen scaled highs seen before last week's intervention and global stock markets crumbled under mounting fears of a new financial crisis. Finance Minister Yoshihiko Noda on several occasions repeated the mantra that he was watching markets closely as the dollar slid below 77 yen, under levels that spurred Tokyo to take action on August 4. He indicated that authorities would wait to see market reaction to U.S. Federal Reserve decisions later in the day (2:15 p.m. EDT) before deciding whether to act again.
What!? they are thinking about doing this again!? WTF!? God! I'm so pissed off about this I want to scream! How many times do they do this over and over and over and the same thing happens over and over until they finally learn? If history is any judge then we know that they never learn!
The only thing that does make me happy this morning is the news that, finally, it looks like we will get rid of that moron prime minister Kan...
Prospects grew on Wednesday that Prime Minister Naoto Kan would resign this month, setting the stage for the selection of Japan's sixth leader in five years as the country struggles to rebuild from a massive tsunami, forge a new energy policy in the wake of a nuclear crisis and fix tattered state finances. With two key bills that Kan wants to make into law before he goes looking likely to be enacted before parliament's session ends on Aug. 31, Japanese media said Kan's Democratic Party was planning to vote as early as Aug. 28 to select a new leader. Finance Minister Yoshihiko Noda, who favours paying for bulging social security costs by raising the 5 percent sales tax, and like Kan sees reining in ballooning public debt as policy priority, is mooted as a leading contender.
Noda!? The guy who keeps recommending that Japan buy dollars to lower the value of the yen!? Are you kidding me? No. Can't be. I just can't believe that. I've died and gone to hell. I refuse to accept it.
Well, Noda or not, if we can judge from the past, the next guy who will torture the Japanese nation as prime minister will be just as much of a dolt as Kan. I think Noda will be even worse. Now that's hard to imagine!
The Japanese government must be totally out of their minds. Which is worst the US government of the Japanese? Hmmm. Good question:
MISTER ROGERS - YOU CAN NEVER GO DOWN THE DRAIN
On August 4th, I wrote a short blog post entitled the Japanese Central Bank Throws Away a Billion Dollars Again. It was another protest over the Japanese government repeating past mistakes by using tax monies to buy dollars to support the yen. I wrote:
This morning when I woke up I checked the financial markets, gold, silver and, of course, the dollar yen rate.
I was somewhat surprised to see the yen at ¥76.9-something to the US dollar. A hour or two later, the yen had dropped to its current ¥78.9 per US dollar. Obviously the Japanese Central Bank intervened and bought a bunch of dollars.
Fools. When will they ever learn? They keep throwing our hard earned tax money down the drain to stop the yen's rise, but it is all in vain as the yen's appreciation continues.
I would later learn that it wasn't a "billion dollars" (of course not!) but $56 billion dollars. I wrote that history would repeat itself and that these types of market interventions never work. Japan has tried this sort of thing over and over and the results are always the same; they may halt, temporarily, the rise of the yen, but they cannot stop the yen from rising as interventions do nothing to change market fundamentals.
Remember, less than one year ago, for the first time in 15 years, in Sept. of 2010 when Japan intervened to stop the yen's rise?
Japan intervened in the foreign-exchange market for the first time since 2004 after a surge in the yen to the strongest against the dollar in 15 years threatened to stunt the nation’s economic recovery.
Finance Minister Yoshihiko Noda confirmed the intervention, speaking to reporters today in Tokyo. He said Japan contacted other nations about the step, without specifying that today’s measure was taken unilaterally. Chief Cabinet Secretary Yoshito Sengoku said the ministry considers 82 per dollar to be the line of defense, after it reached a high of 82.88 earlier today.
Japan hadn’t intervened to sell yen in the foreign-exchange market since 2004, when the yen was around 109 per dollar. The Bank of Japan, acting on behest of the Ministry of Finance, sold 14.8 trillion yen in the first three months of 2004, after record sales of 20.4 trillion yen in 2003. Noda didn’t say how much was used in today’s action, while that figure will be released at a later date.
Japan is now slipping down a very dangerous slope and I fear that the slide is increasing in velocity. This makes for at least three publicly announced interventions in less than one year.
As I wrote, interventions never work. Mish Shedlock sensei! back me up on this one, will you?
Countries are now playing a game of "Top This" to see who can do the dumbest things.... If stocks are ready to go up they will. If not they won't. Intervention will accomplish nothing other than create an environment of suspicion that stocks need to be propped up or they would fall. When intervention starts, investors are deprived of normal market signals and will not know if share prices have really bottomed or not. This silliness by Japan is going to create massive mistrust, and massive mistrust is never good for the markets.
I write over and over until my fingers are bleeding that the government is run by idiots. For over twenty years, the clowns "at the helm" of the Japanese government have been creating debt and trying to manipulate the markets. We have the current situation to show for it: Massive public debt and an economy mired in the mud.
Last year's currency intervention was to stop the yen when it was at about ¥82 to the US dollar. The Japanese Central Bank threw $63 billion dollars at the problem then.
FIVE DAYS ago, the yen and dollar rate was ¥76.9 yen to one US dollar. The Japanese government threw $56 billion dollars at that. They were patting themselves on the back because the yen quickly shot past ¥80 to the US dollar. That was on August 4, 2011.
As of 6:38 am Aug. 9, 2011
Now, today, it is August 9, 2011 and the yen - dollar rate sits at ¥77.77 to one US dollar. The intervention, after a short five days is shown to be a total failure.
The most laughable part of this is the Japanese Finance Minister Yoda, Noda, whatever his name is actually said:
"It's better to wait for a little while before judging the impact of intervention," he told a news conference.
That's like the big race at the horse track. The results have been made official, the winning horse has already been claimed winner and is already in the winner's circle and Noda is holding a losing ticket. Yet he says, "We'd better wait awhile. There might be a claim!"
Ha! Ha! Ha!
The Dow Jones stock market crashed today 5.55% (-634.76). The Nikkei will follow suit. The yen is almost back to where it was a week ago.
What's the Japanese government solution to the problem?
Economics Minister Kaoru Yosano warned markets on Friday that they should not assume that Tokyo is done with stepping into the market, while stressing again the need for Japan, Europe and the United States to adopt common policies to contain the pessimism about the global economy.
Insanity: Doing the same thing over and over again and expecting different results... - Albert Einstein
