{"id":18650,"date":"2016-03-09T11:45:16","date_gmt":"2016-03-09T16:45:16","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18650"},"modified":"2016-03-09T11:45:41","modified_gmt":"2016-03-09T16:45:41","slug":"why-this-sucker-is-going-down-the-case-of-japans-busted-bond-market","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18650","title":{"rendered":"Why This Sucker Is Going Down\u2014\u2014The Case Of Japan\u2019s Busted Bond Market"},"content":{"rendered":"
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Why This Sucker Is Going Down\u2014\u2014The Case Of Japan\u2019s Busted Bond Market<\/a><\/h3>\n<\/header>\n
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The world financial system is\u00a0booby-trapped with unprecedented\u00a0anomalies, deformations and\u00a0contradictions. It\u2019s not remotely stable or safe at any speed, and most certainly not at the rate at which\u00a0today\u2019s robo-machines and fast money traders pivot, whirl, reverse and retrace.<\/div>\n
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Indeed,\u00a0every day there are new ructions in the casino that warn investors to get\u00a0out of harm\u2019s way with all deliberate speed. And last night\u2019s eruption in the Japanese bond market was a doozy.<\/p>\n

The government of what can only be described as an old age colony sinking into certain bankruptcy sold 30-year bonds at an all-time low of\u00a047 basis points<\/strong><\/em>. Let me clear here that we are talking about a record low not just for Japan but for the history of mankind.<\/p>\n

To be sure, loaning any government 30-year money at 47 basis points is inherently\u00a0a foolhardy proposition, but its just plain bonkers when it comes to Japan.<\/p>\n

Here is its 30-year fiscal record\u00a0in nutshell. Not withstanding years of chronic red ink and its recent 2014 consumption tax increase from 5% to 8%, Japan\u00a0is still heading straight for fiscal oblivion. Last year (2015)\u00a0it\u00a0spent just under 100 trillion yen, but took in hardly 50 trillion yen of revenue, stacking the difference on its already debilitating mountain of public debt, which has now reached 240% of GDP.<\/p>\n

\"\"<\/a><\/p>\n

That\u2019s right. A government which is borrowing nearly 50 cents on every dollar of outlays should be paying a huge risk premium to\u00a0even access the bond market. But a government with a 240%\u00a0debt-to-GDP ratio\u00a0peering into\u00a0a demographic sinkhole would be hard pressed to borrow at any price at all\u00a0on an honest free market.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Why This Sucker Is Going Down\u2014\u2014The Case Of Japan\u2019s Busted Bond Market The world financial system is\u00a0booby-trapped with unprecedented\u00a0anomalies, deformations and\u00a0contradictions. It\u2019s not remotely stable or safe at any speed, and most certainly not at the rate at which\u00a0today\u2019s robo-machines and fast money traders pivot, whirl, reverse and retrace. Indeed,\u00a0every day there are new ructions […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5185,5979,2120,195,353,452,783],"class_list":["post-18650","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bond-market","tag-contracorner","tag-david-stockman","tag-debt","tag-gdp","tag-japan","tag-taxes"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18650"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18650\/revisions"}],"predecessor-version":[{"id":18652,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18650\/revisions\/18652"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}