|KYLE BASS: On Friday, The Market Gave Us The First Glimpse Of The Japan Blowup|
|Business Insider, Matthew Boesler, 09/04/2013 (traduire en Français )|
Kyle Bass, the hedge fund manager who has become the most prominent voice in the market betting on a collapse of Japan's sovereign bond market, was on Bloomberg TV this morning discussing the trade.
(On Thursday, the Bank of Japan announced its massive new stimulus program. On Friday, there was a big sell-off in short-dated Japanese government bonds, causing yields to spike. The chart below shows the move.)
Bass told Bloomberg TV:
I think it's important to talk about the BoJ's "shock and awe" campaign, where they are going to double the monetary base by the end of next year, which is unprecedented. They're going to buy roughly 60 trillion yen per year of bonds in the next two years, which is 11 percent of GDP, or their whole fiscal deficit.
This is what I find fascinating in the whole situation. [The Bank of Japan] came out and told you: "The new sheriff is in town, and we've got you." Right? "We're going to buy everything we can buy. Don't worry."
And what happened on Friday? Investors in JGBs panicked. Which is, again, it's really the first diversion from the 20-year norm of their ability to just swallow the numbers and not worry. They actually worried.
According to Bass, this episode illustrates that other market participants are finally coming around to his view on Japanese government bonds.
Bass said in the interview:
You have to think about – 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 that owns the bonds knows they are insolvent.
It's a question of how long they can hang on. And what changes their views are a multitude of variables...
You never know what sparks the qualitative perceptions of investors to change, but what I saw Friday was it began to change.
I'm not saying it's over today. I'm saying, this is the first deviation of the sanctity of that marketplace. And it was a complete panic on Friday.
The 5-year JGB yield keeps heading higher this week.
L'interview de Bass :
|Bass Sees `Beginning of the End' for Japanese Bonds|
|Bloomberg, 09/04/2013 (traduire en Français )|
Notez aussi que l'on assiste à une japanification de l'Europe, avec 20 ans de retard sur le Japon, alors que les banques italiennes détiennent une part de plus en plus importante de l'arnaque à la dette publique :
|Italian Bank Holdings Of Italian Debt Rise To All Time High|
|ZeroHedge, 09/04/2013 (traduire en Français )|