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B O J Ends Easy Money Policy -- H P C Here We Come?

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http://biz.yahoo.com/ap/060411/japan_easy_money.html?.v=3

AP

Japan Central Bank Ends Easy Money Policy

Tuesday April 11, 2:20 am ET

By Hans Greimel, Associated Press Writer

Japan's Gain Could Be World's Loss As Central Bank Ends Easy Money Policy

TOKYO (AP) -- Imagine a bank that doles out loans but charges no interest. For five years, that's what Japan has been for the world economy -- an all-purpose lender with next-to-nothing borrowing costs thanks to the central bank's zero interest rate policy.
The trend helped pump up economies, stocks and foreign currencies from America to Australia. But concerns are mounting it could all unravel on a global scale with the Bank of Japan's decision last month to finally tighten the taps on all the easy money.
"
When it starts to reverse, it could lead to some real shock waves in the market," warned Kenneth S. Courtis, the Asia vice chairman of Goldman Sachs Ltd. in Tokyo
.
It didn't take long for global investors to start exploiting all this cash sloshing around at close to zero percent.
They borrowed money from Japanese banks and invested it overseas for higher returns. In the 12-nation euro zone, the key interest rate is 2.5 percent, while the U.S. benchmark rates are now 4.75 percent.
Other popular destinations have been New Zealand, where the key interest rate is
7.25 percent
, and Iceland, where the central bank recently hiked rates to
11.5 percent
.
In a sign that investors are already reacting to the shift, the yield on Japan's 10-year government bond has climbed to around 1.9 percent from 1.6 percent since the BOJ's announcement last month
.
On a broader scale, Japan's decision to tighten monetary policy completes a rare picture of rising rates in the world's biggest economies,
with the European Central Bank and the U.S. Federal Reserve lifting global borrowing costs from their lowest levels since the 1970s
.

Fellow HPCers, we have been warned. This is very serious news and the dramatic change coming to the financial markets will undoubtedly bring the long awaited HPC but it will also cause some collateral damage to anything else that is IR sensitive. It is definitely time to dump long term bonds as well as leveraged real estate.

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http://www.latimes.com/business/nationworl...ack=1&cset=true

Bank of Japan Keeps Interest Rates at Zero

By YURI KAGEYAMA, AP Business Writer

12:05 AM PDT, April 11, 2006

TOKYO -- Japan's central bank left interest rates at zero Tuesday, deciding to wait on raising interest rates
after abandoning its supereasy monetary policy a month ago
.
The Bank of Japan's unanimous decision, coming afte a two-day policy board meeting, was in line with market expectations because the bank had made clear the transition to raising interest rates would be very gradual.
In about the only concrete sign that that the central bank had ended its super-easy policy, the bank said it has allowed the amount of excess cash in the banking system to decline slowly. As of Tuesday, that amount shrank to 25.7 trillion yen ($217 billion) from its previous range of 30 trillion yen ($254 billion) to 35 trillion yen ($296 billion).
Jun Yamamoto, senior economist with Mizuho Research Institute in Tokyo, said he expects the Bank of Japan to start lifting the benchmark overnight loan rate from zero -- probably to 0.25 percent -- in July or August.

IR are already rising in Japan--the quantative easing that is going on is a tightening of credit which occurs without the official "REPO" rate being changed. Step one is to introduce tightening through the banking system, step two the raising of the central bank rate to follow taking up the slack between the commercial banks and the B o J.

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. . . and, thanks to you, warned and warned and warned and warned and warned . . . .

Don't shoot the messenger BTB.

Realist Bear is doing a great job and is now one of the mainstays of this forum which probably accounts for the increasingly snide attacks on him by certain posters.

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Don't shoot the messenger BTB.

Realist Bear is doing a great job and is now one of the mainstays of this forum which probably accounts for the increasingly snide attacks on him by certain posters.

Indeed. He may put a bearish spin on things, but have you seen some of the tripe in the meeja relating to the ODPM figures.

He also does not seem to attack or flame other members, even bulls, so fair play to him.

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According to the beeb, Japan has kept its rates frozen for now.

Beeb are on target , but they also warned that the IR hike is now due in the summer:

http://news.bbc.co.uk/1/hi/business/4898166.stm

Japan leaves rates close to zero

The numbers are starting to stack up for the Japanese economy
The Bank of Japan has left its interest rates at close to zero, as it tries to keep the economic recovery on course.
Analysts said they now expect a quarter of a percentage point rate rise in July or August, as inflation returns to the world's second-largest economy.

This does not mean we have until July or August to unload IR sensitive assetts as the bond market is already reacting and will probably continue rising as the date set for the B o J to act draws closer. We can thank Japan for the heads up. Watch the big investors and where they move their assetts--property will probably be avoided like the plague.

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Perhaps we need separate forums – one to conduct spin-wars and another for de-spin or analysis. The sheer volume of spin both outside and inside the forum is something that we need to cut through, IMHO of course.

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Realist Bear is doing a great job and is now one of the mainstays of this forum which probably accounts for the increasingly snide attacks on him by certain posters.

too bloody right, keep it up RB B)

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He's just a repetetive spinmeister.

We are all "spinmeisters" to some extent as we all like to put our own "slant" on things to some degree, you more than most TTRTR ;)

As for him being "repetitive" that's nonsense. He regularly seeks out and posts NEW articles all of which are relevant to the housing market. If he wants to put his own "spin" on them so what. We're all capable of making our own minds up aren't we ?

Anyway, as I said previously RB must be doing a good job on here to provoke your increasingly desperate attempts to undermine him. B)

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We are all "spinmeisters" to some extent as we all like to put our own "slant" on things to some degree, you more than most TTRTR ;)

As for him being "repetitive" that's nonsense. He regularly seeks out and posts NEW articles all of which are relevant to the housing market. If he wants to put his own "spin" on them so what. We're all capable of making our own minds up aren't we ?

Anyway, as I said previously RB must be doing a good job on here to provoke your increasingly desperate attempts to undermine him. B)

Yes I admit to my own brand of spin, but does he?

And as for repetition, do you realise the number of time's he's written 'buy low, sell high'?

You'd think he was trying to say something..... ;)

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Speculators in London hoping for a quick buy-to-eat profit have been queuing all night to secure lucrative advance deals in the highly volatile luxury sandwich market. The price of a luxury wagyu and plum tomato with foie gras, truffle mayonnaise and cheese in sour dough bread has today reached an eye-popping £85.

A healthy and hearty opportunity – a snip at £85

_41542850_sandwich203.jpg

City economists, commenting on the apparent extravagance, suggested that the surprisingly high price tag could be explained if investors applied a asset pricing model and discounted the cost of future meals displaced by the hearty sandwich at a rate that included a significant “convenience and health” premium. Inveterate doom mongers, however, point to the staggering100x ratio between this and a McPound-Stretcher, and suggest that such outlandish folly and exuberance will lead to a severe sandwich crash that would leave thousands of recent buy-to-eat speculators with an embarrassing fridge full of date-expired snacks. ;)

BBC link:

http://news.bbc.co.uk/1/hi/england/london/4894952.stm

Edited by spline

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And as for repetition, do you realise the number of time's he's written 'buy low, sell high'

Given how few 'investors' seem to understand that simple rule, it deserves repetition.

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News just in from UPI:

http://www.upi.com/NewsTrack/view.php?Stor...11-032926-5302r

Selfridge's in London charges 85 pounds for the snack. For that price, a buyer gets some luxury ingredients, including
fermented sourdough bread, red pepper confit and foie gras
.
But the real reason for the
high price
is the meat, Japanese beef flown in fresh. The cattle that produce it are
fed on beer and sake
as well as grain and
massaged
to make their meat tender.
McDonald says the idea for the sandwich came to him while he was on the train. He began thinking about what he would put in a sandwich
if price were not an issue
.

A clear disconnection from reality, and is this "up up and away" attitude actually sustainable? :o

Edited by spline

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http://biz.yahoo.com/ap/060411/japan_easy_money.html?.v=3

AP

Japan Central Bank Ends Easy Money Policy

Tuesday April 11, 2:20 am ET

By Hans Greimel, Associated Press Writer

Japan's Gain Could Be World's Loss As Central Bank Ends Easy Money Policy

TOKYO (AP) -- Imagine a bank that doles out loans but charges no interest. For five years, that's what Japan has been for the world economy -- an all-purpose lender with next-to-nothing borrowing costs thanks to the central bank's zero interest rate policy.
The trend helped pump up economies, stocks and foreign currencies from America to Australia. But concerns are mounting it could all unravel on a global scale with the Bank of Japan's decision last month to finally tighten the taps on all the easy money.
"
When it starts to reverse, it could lead to some real shock waves in the market," warned Kenneth S. Courtis, the Asia vice chairman of Goldman Sachs Ltd. in Tokyo
.
It didn't take long for global investors to start exploiting all this cash sloshing around at close to zero percent.
They borrowed money from Japanese banks and invested it overseas for higher returns. In the 12-nation euro zone, the key interest rate is 2.5 percent, while the U.S. benchmark rates are now 4.75 percent.
Other popular destinations have been New Zealand, where the key interest rate is
7.25 percent
, and Iceland, where the central bank recently hiked rates to
11.5 percent
.
In a sign that investors are already reacting to the shift, the yield on Japan's 10-year government bond has climbed to around 1.9 percent from 1.6 percent since the BOJ's announcement last month
.
On a broader scale, Japan's decision to tighten monetary policy completes a rare picture of rising rates in the world's biggest economies,
with the European Central Bank and the U.S. Federal Reserve lifting global borrowing costs from their lowest levels since the 1970s
.

Fellow HPCers, we have been warned. This is very serious news and the dramatic change coming to the financial markets will undoubtedly bring the long awaited HPC but it will also cause some collateral damage to anything else that is IR sensitive. It is definitely time to dump long term bonds as well as leveraged real estate.

Ho ho ho ho ho! Here we go.........

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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