The recently-plunging Nikkei may have already solved this issue, but Japan's giant public...


The recently-plunging Nikkei may have already solved this issue, but Japan's giant public pension fund (GPIF) is considering a change in strategy that would otherwise force it to sell stocks (EWJ, DXJ) and buy JGBs (JGBS) as equities rally and bond prices fall. No significant change in policy has been made since 2006. Of interest: Last night's 5% dive in stocks failed to put in a bid for JGBs, the yield on the 10-year flat at 0.89%.

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Comments (3)
  • positivethoughts
    , contributor
    Comments (2064) | Send Message
     
    If the Japanese Pension fund stops buying bonds, and if the Japanese government continues to want to sell their bonds to finance their deficits, wont this put massive pressure on yields to encourage otherwise uninterested buyers to buy the JGBs? Isnt this bad for interest rates and for the ability of Japan to pack back it's debt in the long run?
    30 May 2013, 07:56 AM Reply Like
  • positivethoughts
    , contributor
    Comments (2064) | Send Message
     
    Just read that the pension fund only has $1 Trillion in assets under management. How, if Japan has close to 30 million retirees, is $1T enough to cover pension plan payouts during their retirement period? That's a pot of only 33,000 per retiree.

     

    Link from article on America's social security problem. Since 2012, new retirees in the U.S. will be the first to receive less money from SS than they paid in.

     

    SS is a ponzi scheme. Bernie Madoff went to jail for his scheme. Why arent government officials being arrested for their involvement in the ponzi scheme?

     

    http://fxn.ws/16s78eD
    30 May 2013, 08:27 AM Reply Like
  • Yorick
    , contributor
    Comments (761) | Send Message
     
    Here, here to both comments above...Fed and BOJ can't find external buyers so have to buy up everything themselves...unnatural is the only word that comes to mind
    30 May 2013, 02:09 PM Reply Like
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