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Thread: Kyle Bass' 5 Reasons Why The Japanese Government Bond Market Will Collapse by 2016

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    Default Kyle Bass' 5 Reasons Why The Japanese Government Bond Market Will Collapse by 2016

    Kyle Bass' 5 Reasons Why The Japanese Government Bond Market Will Collapse by 2016






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    Member bxm042's Avatar
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    How can we profit from this? CDS seem to be the most profitable, but those generally aren't available to us. Anyone know much about iTraxx, or any other way we can get in on the action?

    Shorting the yen while generally a good idea relies too much on timing I think. Lot of risk if you go in too soon. I also think the returns would be bigger with a CDS
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    Quote Originally Posted by emazur View Post
    I haven't heard of this guy before. Is he a libertarian?

    Also, +rep to the first person who can post me an amusing picture of an adult diaper fashion show
    Well, I'm not really sure what would be considered "amusing" in this context ... but I'll give it a shot:



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    Quote Originally Posted by bxm042 View Post
    How can we profit from this? CDS seem to be the most profitable, but those generally aren't available to us. Anyone know much about iTraxx, or any other way we can get in on the action?

    Shorting the yen while generally a good idea relies too much on timing I think. Lot of risk if you go in too soon. I also think the returns would be bigger with a CDS
    He's telling the truth but at the same time.... Japan is in the "too big to fail" group.

    Can isolate Greece by spending 10 years building a firewall around it.

    But Japan? no.

    The rest of the world might as well start the Japanese bailout right now. That would be almost as big as letting the entire Eurozone fail all at one time.
    Last edited by Agorism; 01-04-2013 at 07:44 PM.

  7. #6

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    It's worse than the Eurozone and certainly much worse than Greece.

    The Eurozone's demographic nightmare is decades out and their financial crisis issues remain to be seen. If you support Austrian economics then cutting spending should resolve a debt issue...

    As mentioned in the video, Japan is the most Xenophobic nation -and- their people don't reproduce. So their demographic nightmare is right now and you can't change that.

    Europe's average age: 39.9 (source: http://en.worldstat.info/Europe/List...tal_median_age)
    USA's average age: 37.2 (source: http://www.census.gov/prod/cen2010/b...c2010br-03.pdf)
    Japan's average age: 44.6 (source: http://en.wikipedia.org/wiki/List_of..._by_median_age)

    If that number holds true, the USA would be where Japan is in 20 to 30 years. Europe getting there a little sooner. Both examples assume nothing changes... no wars, no baby booms, etc.

    What concerns me most is that Ben Bernanke is following the Japan road map. Japan is 20 years into it and is starting to implode. Bernanke started down the road in 2008...

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    Quote Originally Posted by bxm042 View Post
    How can we profit from this? CDS seem to be the most profitable, but those generally aren't available to us. Anyone know much about iTraxx, or any other way we can get in on the action?

    Shorting the yen while generally a good idea relies too much on timing I think. Lot of risk if you go in too soon. I also think the returns would be bigger with a CDS
    I believe buying puts on the FXJ is the best way for an average joe, but you can't buy them 4 years out. I think Jan 2014 or 15 is the farthest you can go.

  9. #8

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    To those who view an imminent collapse of the US Bond market - take note.

    One of the smartest and well spoken humans on this planet doesn't even view Japans bond market collapse as imminent. 2016.

    Japan is, structurally, a catastrophe when compared to the US and it's structural issues. The US may be in rough shape but it is in WAY better shape than Japan.

    I saw an interview with Kyle Bass (from Oct 2012) stating that he thought the major cracks in the Japanese bond market would surface in 2013 - but COLLAPSE may not occur until 2016. I'm inclined to agree.

    Japan/UK/USA - these are HUGE countries, effectively, superpowers...these sort of things take a lot of time to ferment.

    Japan is FIRST in the collapse.

    When I say collapse...I do not mean just the collapse of an aspect of it's credit markets...I mean the entire way that it is structured as an economy.

    Japan will go down BEFORE the US.

    Relative to the other sinking ships, the US (it's dollar and bond markets) are likely to sink the LEAST quickly.
    "Like an army falling, one by one by one" - Linkin Park

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    Saved to watch for later when I have time.
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    great video. + rep. Im gonna look up more from this guy.

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    Found someone post a response video to this. http://www.youtube.com/watch?v=QWmOmt1zJ7Y


    Im gonna watch it in a bit see if the guy knows what hes talking about.

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    Another great video from kyle Bass. Hes definately one of us. Talks about Europe more:

    http://www.youtube.com/watch?v=-quUyId2WZ0

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    Japan will go down BEFORE the US.

    I don't think Japan can go down without taking everyone with them.

    So it's bail out time. Whether the Fed has to do it or Europe or whatever. Probably the Fed since Europe bank has no actual power.

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    Mr. Norman is a moron.

    Kyle Bass is nearly a different species (a better one).

    Quote Originally Posted by gwax23 View Post
    Found someone post a response video to this. http://www.youtube.com/watch?v=QWmOmt1zJ7Y


    Im gonna watch it in a bit see if the guy knows what hes talking about.
    "Like an army falling, one by one by one" - Linkin Park

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    Quote Originally Posted by Seraphim View Post
    Mr. Norman is a moron.

    Kyle Bass is nearly a different species (a better one).
    Yes came to the same conclusion very quick. Kyle Bass seems very schiff-like to me which is great.

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    Quote Originally Posted by Seraphim View Post
    To those who view an imminent collapse of the US Bond market - take note.

    One of the smartest and well spoken humans on this planet doesn't even view Japans bond market collapse as imminent. 2016.

    Japan is, structurally, a catastrophe when compared to the US and it's structural issues. The US may be in rough shape but it is in WAY better shape than Japan.

    I saw an interview with Kyle Bass (from Oct 2012) stating that he thought the major cracks in the Japanese bond market would surface in 2013 - but COLLAPSE may not occur until 2016. I'm inclined to agree.

    Japan/UK/USA - these are HUGE countries, effectively, superpowers...these sort of things take a lot of time to ferment.

    Japan is FIRST in the collapse.

    When I say collapse...I do not mean just the collapse of an aspect of it's credit markets...I mean the entire way that it is structured as an economy.

    Japan will go down BEFORE the US.

    Relative to the other sinking ships, the US (it's dollar and bond markets) are likely to sink the LEAST quickly.
    Not sure about that, Japans debt is all internally held where as USA a large portion is external held. They have more control over it than the US. The only thing going for the US is the reserve currency of the world which is quickly being rejected for trade between countries.
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    Well the USDJPY has exploded as of recent. By the chart, it looks like this is the biggest move in 5 years. Something could be brewing, especially as prime minister abe has effectively taken over the central bank.



    Edit: Holy Crap, Look at how cheap the fx options are? You can purchase put options on yen for next to nothing.
    Last edited by jclay2; 01-06-2013 at 04:29 AM.

  19. #18

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    Kyle Bass goes over this in depth.

    Japan's demographics are AWEFUL. As stated, they now sell more ADULT diapers then child diapers. That is a fact. A very, very destabilizing fact.

    These "savers" are now offloading their saved money because they are into retirement and there are now fewer participants entering 1) the socialized security systems 2) the bond/savings market.

    Japan cannot hold a candle to the US from a standpoint of long standing viability. And that is saying something as the US appears to be dying of gangrenous infection. Japan CANNOT save it's current structure. It's not impropable, it's impossible.

    The US faces IMPROBABLE odds of returning itself to a strong structure (social and economic).

    Japans radical restructuring is imminent and unavoidable.

    This is not a doomsday prediction, that's not my MO. Merely pointing out that the gravy train is over. A return to a healthy social and economic environment will take a 20-30 year restructuring with the most difficult years beginning NOW.


    Quote Originally Posted by seapilot View Post
    Not sure about that, Japans debt is all internally held where as USA a large portion is external held. They have more control over it than the US. The only thing going for the US is the reserve currency of the world which is quickly being rejected for trade between countries.
    "Like an army falling, one by one by one" - Linkin Park

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    Quote Originally Posted by gwax23 View Post
    Found someone post a response video to this. http://www.youtube.com/watch?v=QWmOmt1zJ7Y


    Im gonna watch it in a bit see if the guy knows what hes talking about.
    Dude he is the BIGGEST MORON EVER. Look up his Peter Schiff series. He used to be big on banks and housing.... until.

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    Quote Originally Posted by talkingpointes View Post
    Dude he is the BIGGEST MORON EVER. Look up his Peter Schiff series. He used to be big on banks and housing.... until.
    yes yes I know that now. I saw the title and posted it before I watched it. After about a minute I realize this guy is a complete idiot and a quick view of his channel confirmed that further.

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    I watched his vid and while I totally disagree with his views - he is right on many levels as to what has happened and may happen in the short term. long-term it's game over once they lose control - but they are still in control and most everything that should have happened - hasn't. wouldn't you agree? guess that's what a die-hard Kensyan looks like.

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    from december 2012





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