Jim’s Mailbox

Posted at 3:45 PM (CST) by & filed under Jim's Mailbox.

Jim,

Most major central banks, not just Japan.

Dave

Bank Of Japan Morphs Into A Hedge Fund
April 6, 2019

Investors are betting big on Japanese stocks. Well, at least one: the nation’s central bank.

Overseas punters couldn’t seem to sell yen-denominated shares fast enough in the fiscal year ending March 31. In fact, they dumped them by the largest margin in 31 years – US$50 billion. That has the Bank of Japan gorging on stocks via exchange-traded funds – by roughly that same exact amount.

The plot thickens when you consider that in 2018, the BOJ’s balance sheet surpassed the entire size of Japan’s $4.9 trillion GDP. First, Governor Haruhiko Kuroda’s team cornered Japan’s government bond market, hoarding more than half of all outstanding securities. Now it’s bigfooting equities. Welcome to what’s arguably the world’s biggest hedge fund.

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Jim,

As you have said 100 times, there are no markets!

Dave

Here’s What It’s Like To Be a Bear in a Rigged Market
April 6, 2019

Central bankers and media handlers must be laughing at how easy it is to slaughter the Bears and doubters with another fake-news round of trade-deal rumors and another Fed parrot being prompted to repeat some dovish mumbo-jumbo.

It’s not just tough being a Bear in a market rigged by trade deal rumors, Federal Reserve dovishness, a tsunami of Chinese liquidity and $270 billion in stock buy-backs in the first quarter–it’s impossible. Even “smarter than the average Bear” Yogi couldn’t beat the market, and so he ended up taking one for the Jellystone team so other Bears might live to fight another day:

 

 

 

 

 

 

 

 

 

 

 

 

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