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  1. #1271
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    What I have learned recently that the recent fall on the financial markets is probably attributable to the unwind of some of the Japanese carry trade.

    The question it raises for me is what interest rate are they borrowing at and who are they borrowing from and more importantly can I do it?

    The correction was due to a .15% increase in the Japanese OCR to .25%. I am unsure if this was the reason for the appreciation of the yen as it is more likely to be temporary with people selling assets and buying yen to pay back their loans in a panic.

    Are interest rates likely to go higher in Japan?

    The Japanese government debt is $1.3quadrillion yen or $9.2trill USD

    1,300,000,000,000,000 * 1% = 13,000,000,000,000 better check my calcs as it is easy to make a big mistake with this many zeros.

    The government total tax revenue is $72trill yen or 72,000,000,000,000 so a 1% increase is nearly half the total tax revenue. How likely is it that there will be anymore significant rate rises?

  2. #1272
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    The casualties of Adrian and Luxon's engineered recession (the poor of course):

    https://www.stuff.co.nz/nz-news/3503...cants-one-role

    1000 applications per job. Reducing demand in the economy without doing anything about supply, rents and price manipulation by companies.

  3. #1273
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    Quote Originally Posted by Aaron View Post
    What I have learned recently that the recent fall on the financial markets is probably attributable to the unwind of some of the Japanese carry trade.

    The question it raises for me is what interest rate are they borrowing at and who are they borrowing from and more importantly can I do it?

    The correction was due to a .15% increase in the Japanese OCR to .25%. I am unsure if this was the reason for the appreciation of the yen as it is more likely to be temporary with people selling assets and buying yen to pay back their loans in a panic.

    Are interest rates likely to go higher in Japan?

    The Japanese government debt is $1.3quadrillion yen or $9.2trill USD

    1,300,000,000,000,000 * 1% = 13,000,000,000,000 better check my calcs as it is easy to make a big mistake with this many zeros.

    The government total tax revenue is $72trill yen or 72,000,000,000,000 so a 1% increase is nearly half the total tax revenue. How likely is it that there will be anymore significant rate rises?
    You really need to know what you are doing if you get involved in something like this and I would suggest that carry trade is pretty much over.
    They were borrowing in JPY due to the very low interest rates comparative to the US, but then the Japanese Government unexpectedly raised rates right at a time when the US is looking to lowering their own. The exposure you have is FX and as seen recently this can move swiftly especially when there is a crowded trade.
    The JPY & Nikkei have recovered circa half their losses so perhaps some have re-entered the trade, but I would be wary of another sell off.
    Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.

  4. #1274
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    Quote Originally Posted by Daytr View Post
    You really need to know what you are doing if you get involved in something like this and I would suggest that carry trade is pretty much over.
    They were borrowing in JPY due to the very low interest rates comparative to the US, but then the Japanese Government unexpectedly raised rates right at a time when the US is looking to lowering their own. The exposure you have is FX and as seen recently this can move swiftly especially when there is a crowded trade.
    The JPY & Nikkei have recovered circa half their losses so perhaps some have re-entered the trade, but I would be wary of another sell off.
    I was just imagining a world where I could get free money. I am sure there must be some restrictions and risks.

    https://www.stuff.co.nz/nz-news/3503...ke-it-cleaners

    Be interesting to know what this aggrieved employees role at the RBNZ was. She is applying for legal aid so her income must be a bit less than Adrian's. Shouldn't really be a problem for Adrian he could just print up $30,000 and pay her out. We just have to keep believing that the money has some value.

  5. #1275
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    Front page of the herald was an article about cutting interest rates. All the bank economists are unanimous that it needs to be done urgently. Jarod Kerr from Kiwibank seems the most desperate. He is quite young so I imagine he also has a big mortgage and is relying on house price growth and inflation to make him rich.

    I guess these are the people that need looking after

    https://www.nzherald.co.nz/nz/cut-up...MSPI6CAAUJWU4/

    $350,000 pa household income $1.1million mortgage costing $88,000 at 7%. Even if you said a third went in tax $115,500 and $88,000 on the mortgage how does the remaining $146,500 get spent.

    I am surprised Tory Whanau was not demanding lower interest rates as she struggles with the cost of living crisis along with the rest of us.

    Inflation is not growth but it does make rich people feel better and I guess that is what matters.

    Jerome's cut rates with stock markets and house prices near all time highs, I am sure that is more than enough for Adrian to follow suit.

    To quote Rabobank "Really? A 50 bps cut as a message that the economy is strong? So if they cut by 75 bps the economy is booming? This sounds like something out of George Orwell’s 1984:

    WAR IS PEACE

    FREEDOM IS SLAVERY

    IGNORANCE IS STRENGTH."
    Last edited by Aaron; 20-09-2024 at 07:53 AM.

  6. #1276
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    Hey Aaron, you’ll love this bit I’ve hocked off LinkedIn by a guy called John Young.

    Messing up in Boats & Trains - an alternative perspective

    A tough day for the NZ Armed Services with the loss of one of its ships, but let’s take some heat off the captain and crew of ship and put that NZ$100mio loss into perspective as it pales in comparison with the NZ$10bio plus hole left in the Government's accounts from the Reserve Bank’s shift off the conventional mone-train policy tracks.

    The following represents a completely unauthenticated and entirely fictional accounts of events as seen through the lens of the children’s classic, Thomas the Tank engine:


    Thomas was a central bank engine who lived at a Big Station in Wellington. He had seven small committee wheels that rolled around each year, a short stumpy communications funnel – that sometimes made funny noises; a short stumpy research boiler – which sometimes made things up; and a short stumpy dome – which had lots and lots of different layers of management.

    He was a fussy little central bank engine, always pulling bank coaches one way and another with odd forecasts …. he was cheeky too.

    But Covid came to Sodor Island and Thomas got quite tanked up on using alternative monetary policy tools, even though he told the rest of the trains and carriages on Sodor a week before that they wouldn’t work.

    In reality Thomas didn’t care too much because the Fat Controller gave Thomas a piece of paper that said that Thomas could pretty much do what he wanted because the Fat Controller said he’d pay for it…. so Thomas did, and he did it again and again…the Fat Controller got replaced.

    Thomas was fine though, and he was very happy as he and the other executive trains all got big pay-rises (Cheers!) … they all went dancing in the streets of Wellington to celebrate.

    Sadly for the people of Sodor the passenger fares went up a LOT to pay for the train-wreck that was the economy of Sodor.
    ”When investors are euphoric, they are incapable of recognising euphoria itself “

  7. #1277
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    Nice a happy ending for Thomas and friends.

    No hope for NZ from central bank fuc*ery though. This from RNZ and they do not even rely on real estate for a chunk of their revenue.

    https://www.rnz.co.nz/news/business/...sing-values-up

    Good that they do not publish the authors of this pointless drivel. Come on Adrian we need more than just interest rate cuts to drive up house prices according to RNZ. I guess they are trying to get Adrian to ease up on lending requirements for the banks or perhaps more funding for lending.

    A spineless jellyfish like Adrian should cave with a bit of pressure from the home owning class.

    Funny that the $100mill loss of a boat will be more important to NZers than a $10bio (assume billion) loss on monetary trickery. Although I do not understand how there could be $10,000,000,000 losses. Is this on the large scale asset purchases (LSAP) or in English "printing money to buy govt bonds (LSAP)". If they are held to maturity the interest on them is paid to the RBNZ from the govt. If the loss is only because they bought them at low yields and interest rates went up does it matter if they are just allowed to mature? I guess the govt has no intention of repaying the debt but if they need to roll it over will Adrian be there to provide "liquidity"(money printing) in the NZ govt bond market?

    The govt used the money to spray money around and caused inflation (cost of living crisis) wonderful stuff. We just need to get back there according to the experts.
    Last edited by Aaron; 08-10-2024 at 08:14 AM.

  8. #1278
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    Quote Originally Posted by Aaron View Post
    Nice a happy ending for Thomas and friends.

    No hope for NZ from central bank fuc*ery though. This from RNZ and they do not even rely on real estate for a chunk of their revenue.

    https://www.rnz.co.nz/news/business/...sing-values-up

    Good that they do not publish the authors of this pointless drivel. Come on Adrian we need more than just interest rate cuts to drive up house prices according to RNZ. I guess they are trying to get Adrian to ease up on lending requirements for the banks or perhaps more funding for lending.

    A spineless jellyfish like Adrian should cave with a bit of pressure from the home owning class.

    Funny that the $100mill loss of a boat will be more important to NZers than a $10bio (assume billion) loss on monetary trickery. Although I do not understand how there could be $10,000,000,000 losses. Is this on the large scale asset purchases (LSAP) or in English "printing money to buy govt bonds (LSAP)". If they are held to maturity the interest on them is paid to the RBNZ from the govt. If the loss is only because they bought them at low yields and interest rates went up does it matter if they are just allowed to mature? I guess the govt has no intention of repaying the debt but if they need to roll it over will Adrian be there to provide "liquidity"(money printing) in the NZ govt bond market?

    The govt used the money to spray money around and caused inflation (cost of living crisis) wonderful stuff. We just need to get back there according to the experts.
    Aaron it's all on here
    https://www.rbnz.govt.nz/monetary-po...y-policy-tools
    "We stopped buying bonds on 23 July 2021, and we're now selling down our bonds. As a result, the amount of bonds we hold has started to fall."
    Hence the circa $ 10 Billion loss .Note the Govt and putting $ 250 mio a month into the RBNZ to recapitalise them .........

  9. #1279
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    Quote Originally Posted by stoploss View Post
    Aaron it's all on here
    https://www.rbnz.govt.nz/monetary-po...y-policy-tools
    [FONT="]"We stopped buying bonds [/FONT][FONT="]on 23 July 2021, and we're now selling down our bonds. [/FONT]As a result, the amount of bonds we hold has started to fall."
    Hence the circa $ 10 Billion loss .Note the Govt and putting $ 250 mio a month into the RBNZ to recapitalise them .........
    Thanks for that, my next question would be why are they selling them down. They drove interest rates down printed money and purchased govt bonds at extremely low yields and then raised interest rates creating a big loss on the bonds and then they started selling them down crystalising the losses. I know they got the taxpayer to guarantee the losses but it seems unnecessary crystalising them especially if it is only for the optics of the RBNZ looking like they are not out of control and the $NZ has some real value. Why the need to sell the bonds?
    Last edited by Aaron; 08-10-2024 at 09:47 AM.

  10. #1280
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    Are the bond losses old news?

    I see this on interest.co.nz

    https://www.interest.co.nz/banking/1...4140%20million.

    RBNZ paying a $597mill dividend to govt.

    https://www.rbnz.govt.nz/-/media/pro...eport-2024.pdf

    An asset called Crown indemnity of $4,230,000,000, does this mean they expect the govt to lose this much in the future? $1,800mill in from the crown and $1,930mill govt securities purchased over the 12 months to 30/06/2024. Too late in the day to try and work out this money go round.

    It highlights how little I understand.

    But does suggest cash is a joke much like Adrian who prints a lot of it.
    Last edited by Aaron; 08-10-2024 at 06:10 PM.

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