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JGB 10-Year


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  • 2 months later...

The madness appears to be continuing as the more yen that is available the more it is wanted.  How is it that you produce more and more of something and the price continues to go up??  Is it possible that demand will always outpace supply as it has for the last 40+ years?  Maybe instead of looking at economics for solutions we should look at the illegal drug cartels as an example of more supply just increases prices.

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  • 3 weeks later...

Sorry for the self bump, but the financial porn just seems so interesting.  I only have a very small amount of Japanese investments currently as most positions were closed earlier this year. Irrespective, I still keep an eye on the JGBs and Yen as it is high drama for me.  Noticed that the JGB yield is back to where it was three (3) years ago even after the recent pumping.  Nearly a 35-year bull and counting.





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It seems that being short the JGBs is a wonderfully asymmetrical play.


If you can tolerate RELATIVELY minor losses for a couple of years or so you MAY make multiples of your investment.




“I actually think it’s the beginning of the end…When you have 20 years of pro-cyclicality of thought manifesting itself in the way that it has in Japan…I am not naive enough to think I can predict the end of a 70-year debt super cycle with any kind of precision, but looking at the changes in the qualitative perception of the participants is something that I think is key to the situation and we saw a big change on Friday.”


“When I started sharing our views more globally it was the middle of 2010 and I said I believe the stress would begin to show itself in the next three years. Pretty much three years in, we’re close, and the stress is beginning to show. Maybe that was luck at the time, but now when you ask the timing–look everyone wants the crystal ball and it’s really difficult to predict this, but what you can do is follow where I think the stresses are going to show in the marketplace, but more importantly, you have to get into the heads of the participants because they all have a collective sense of fatalism. When you do the quantitative analysis here, you know they are insolvent. Everyone who owns the bonds knows they are insolvent. It’s a question of how long they can hang on. What changes their views are a multitude of variables, but it’s really important to follow any change in those views. When you see things like Argentina, Greece, Cyprus, Ireland, Italy–you see how fast things go from perfectly stable to completely unstable. In this case I think it will happen more quickly because of the 20 year buildup.”



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