The Bank of Japan finally admits the carry trade is the problem.
So they raise rates to fix it.
Except the pension funds and insurance companies they need to buy Japanese bonds are refusing.
Not because rates are too low. Because the policy environment made investing in Japan too unpredictable in the first place.
So the hikes meant to strengthen the yen are pushing the same institutions further away, and the yen weakens anyway.
They diagnosed the disease correctly for once. They just cannot write a prescription that matches reality, because the whole framework they are working from does not match reality.
That is the pattern. Not just in Japan.
There’s a special ride at Disneyland for those who think that China purposefully brought its housing market back to 2015 price levels and did so while actually maintaining 5% GDP growth and with only 1.5% NPLs…
@mnicoletos
The housing market right now is bizarre.
Sales = 2009 crash levels
Prices = near all-time highs
That combination has never lasted long in history.
Something eventually breaks.
Best career advice I've ever gotten:
Choose a career where you can make $5M a year and no one bats an eye
It's just a blip on the radar
Find the room where that's normal, and get in it