"Go East young man (or woman)"

Pretty much for the last day or so, Google Blogger's server was down so no postings could be written since around noon-time, EST on May 12th. 

Now its working to a point where we're able to leave postings, though unfortunately it recently deleted the posts of all Google bloggers as of 8am on May 12th.  So the submissions of "Greece in photos" and the analysis of AP news' complete blatant lie saying their poll found people believing the economy was getting better when their own numbers proved the opposite, we're deleted.

But no obstacles, small or large, stops 'Ants & Grasshoppers'...

So here we go...

For those who were able to read yesterday's postings before they were pulled due to Google's incompetence, we pointed out that US companies want the US dollar as weak as possible so it can make larger profits in its exports.  And its focusing on overseas markets because the US consumer is completely tapped out between high credit card debts, stagnant wages and inability to use homes as piggy banks i.e. 2nd mortgages.

So what are these businesses doing to survive?

Focus abroad obviously ~

From TheStreet.com-- "Two retail giants, struggling at home, are hoping to have better luck overseas. Wal-Mart and Gap both announced expansion plans to their international business in the last 24 hours; Wal-Mart with the acquisition of a minority stake in a Chinese e-commerce company (Yihaodian), and Gap with the announcement that it is moving its brand into Serbia and the Ukraine."

"Wal-Mart has been aggressively expanding its international business, which includes Brazil, Japan and Mexico, as well as other markets. These overseas operations are expected to make up about 26% of Wal-Mart's total sales in fiscal 2011. But at home, Wal-Mart is grappling with seven consecutive quarters of sagging sales, and is poised to report another decline when it releases its first-quarter results next week. Domestic sales still account for about two-thirds of Wal-Mart's business.. .Gap is facing some similar issues, as its sales have lagged that of competitors."

~ As yourselves this question honestly--  if American businesses do not believe the nation is in recovery and can not depend on American consumers for its survival, are we Really in 'recovery' like the government and media say?  

Springtime pics (Will return Tues 4/12)

Hello everyone..

I'm going to be doing some travelling Sunday into Monday where a wifi connection just isn't possible so 'Ants & Grasshoppers' will resume Mon evening or Tuesday

In the meantime enjoy this pic collection entitled-

Springtime Around the World...

~ Savannah, Georgia  USA

~ Central Park, New York

~ Holland Park, London England

~ Paris, France

~ Netherlands

 ~ Germany

 ~ Kyoto, Japan

Japan Pension Fund Becomes Net Government Bond Seller

So far every bet against JGB´s was a disaster.... But is at least not insignificant when the largest buyer for years has turned to a net seller...... I think when you take a look this link, the following presentation, the confident Rating Agencies & yields like this i think it´s safe to assume that the upside for bonds is "not substantial"......

Bisher haben Wetten gegen japanische Staatsanleihen etliche in den Wahnsinn und sicherlich auch in den finanziellen Ruin getrieben... Wenn aber nun der mit Abstand größte Akteur in diesem Segment nach Jahren von einem massiven Käufer zum Verkäufer notiert lässt das zumindest aufhorchen.....Wenn man sich diesen Link , die folgende Präsentation , die ( noch ) optimistischen Rating Agencies & die aktuellen Renditen vor Augen führt darf man sicherlich behaupten das sich das Chance/Risikoverhältnis nicht gerade merklich bessert...

Japan - Past the Point of No Return - By Vitaliy Katsenelson

H/T Barry Ritholtz

Flashback March 2010

The biggest JGB holder on the planet – the Government Pension Investment Fund (GPIF) – which has already admitted it’s no longer able to roll maturing bonds, has announced that it will open credit lines so it doesn’t have to sell them to fund its obligations…

Looks like they had to end the desperate attempt to stop the unavoidable....

Sieht ganz so aus als wenn jetzt der Zeitpunkt gekommen ist wo das Unvermeindliche nicht mehr länger hinausgezögert werden kann.....

Japan Pension Fund Becomes Net Government Bond Seller

July 13 (Bloomberg) -- Japan’s public pension fund sold more government bonds than it bought for the first time in nine years, underscoring concern that an aging population will make domestic investors less able to finance state borrowings.

The fund sold a net 443.2 billion yen ($5 billion) of Japanese government bonds in the year ended March 31, according to Bank of Japan data released last month. It held 79.5 trillion yen of the securities at the fiscal year end, 11.6 percent of the outstanding amount.

The retirement of baby boomers -- defined in Japan as those born between 1947 and 1949 -- may strain the public coffers as soon as 2012, according to Toshihiro Nagahama, chief economist at Dai-Ichi Life Research Institute in Tokyo. “That may be when Japan’s sovereign risk becomes evident,” he said in an interview in May.

So far the € crises has helped to fill the gap......

Da kommt die momentane € Krise ganz passend.....

M.Pettis

China bought a record amount of Japanese government bonds in May, in an apparent move to shift more of its massive foreign exchange reserves into Japanese debt. Chinese net purchases of Japanese government bonds soared to Y735.2bn ($8.3bn) in May, far outpacing the Y541bn in JGBs bought from January to April, according to Japanese finance ministry figures.

It will be interesting to see if or probably better when the BOJ will be "forced" to start QE Version 18 & 19..... With or without QE this alternative looks much more promising.....

Denke der entscheidende Faktor dürfte sein was die BOJ in Sachen QE machen wird.... Dürfte da über die Jahrezehnte wohl dann Version 18.0 & 19.0 sein..... Mit oder ohne QE ich denke diese Alternative dürfte in jedem Fall vielversprechender sein

Maybe This Time It Is Different.........

So far every bet against the Japanese bond market was a disaster..... But the latest move from the GPIF ( $1.37 trln / 66.32percent of its assets in domestic bonds ! see Profile GPIF Government Pension Investment Fund, Japan ) is really looking "unconventional".....

Bisher ist jeder der gegen japanische Staatsanleihen (JGB) gewettet hat übelst auf den Bauch gefallen.... Da der letzte Schritt des 1.37 trln $ schweren und zu knapp 66% in JGB´s investierten GPIF ( mehr Details GPIF Government Pension Investment Fund, Japan ) allerdings doch recht "unkonventionell" daherkommt ist der Ausgang zwischen Bullen und Bären wohl ungewisser denn je.....

H/T Claire Morel / Reuters

‘Japan’s brewing fiasco’ SocGen’s Dylan Grice via FT Alphaville

The biggest JGB holder on the planet – the Government Pension Investment Fund (GPIF) – which has already admitted it’s no longer able to roll maturing bonds, has announced that it will open credit lines so it doesn’t have to sell them to fund its obligations…

To spell that out: we are going into a year in which the government has ¥213 trillion of bonds to roll over… and the biggest holder of JGBs is openly admitting he has no new inflows of money

Click here & here to get the entire report... Some pretty scary charts & the following stat............

Den kompletten Research Report gibt es hier & hier ... Einige extrem unschöne Charts sowie die nachfolgende Zahl..........

So who will fund the Japanese government´s deficit in the future? It is not likely to be the international capital markets, especially if its bonds are offering only a 1.5% yield.

But if international investors were to demand triple that, pricing JGBs in line with international bond market peers (all priced too generously in my opinion) the game would soon be up because Japan´s current debt service already amounts to 35% of pre-bond issuance revenues.

H/T Zero Hedge

For more on this topic make sure you visit the excellent slide show Japan - The Point Of No Return from Vitaliy N. Katsenelson via Barry

Wer mehr zu diesem Thema sehen möchte dem empfehle ich die erstklassige Ansammlung von Charts Japan - The Point Of No Return von Vitaliy N. Katsenelson via Barry

GOLD Is Not A $ Story........ ;-)

Norinchukin, Owned By More Than 4,000 Shareholders Including Farm, Fishing & Forestry Cooperatives Has To Raise $ 20 Billion.....

WOW! This makes the followoing quote from their Annual Report 2008 even more "amusing"....

Donnerwetter! Die heutige Ankündigung macht die nachfolgende Bemerkung aus dem Annual Report 2008 vom März 2008 noch befremdlicher....

We, therefore, decided to invest our management resources in securities, both in Japan and overseas, under the concept of globally diversified investment.That means that we had decided to switch our business model from that of a conventional nvestor in the Japanese domestic market to a major investor on the international stage and raise our earning ability by carefully controlling our risk exposure.

The fact that the bank is owned almost solely from "cooperatives" makes the whole story even more stunning..... SCARY !

Das ausgerechnet eine Art Genossenschaftsbank hier den Vogel abschießt zeigt einmal mehr das man momentan rein gar nichts auschließen kann..... Beängstigend !

Norinchukin to Raise 1.9 Trillion Yen; CEO Quits Feb. 20 (Bloomberg) -- Norinchukin Bank, the Japanese agricultural lender with Asia’s largest losses on asset-backed securities, plans to raise 1.9 trillion yen ($20.2 billion) in capital and said its chief executive officer will step down.

Deputy President Yoshio Kono will replace CEO Hirofumi Ueno effective April 1, the company said in a statement today in Tokyo. Norinchukin will raise the funds from its members, a nationwide network of agricultural cooperatives with about $875 billion in deposits, by the end of March.

The fund-raising is the biggest in Asia since Industrial & Commercial Bank of China Ltd. collected $22 billion in the world’s largest initial public offering in 2006. Norinchukin lost at least $10 billion on overseas asset-backed securities following the collapse of the U.S. housing market.

“Norinchukin’s capital faces increasing impairment risk due to its relatively large exposure to foreign securitized financial products,” Moody’s Investors Service said in November, when it revised the outlook on the Tokyo-based bank’s Aa2 credit rating to “negative” from “stable.”

> Reed this number twice........ We won´t probably see too many happy Japanese fischers etc for some time to come......

> Dank der nun folgenden schier unglaublichen Zahl wird man den Namen NORINCHUKIN wohl noch öfter im Zusammenhang mit negativen Schlagzeilen hören...... Glückliche japanische Fischer & Förster werden wohl die Ausnahme bleiben......

Norinchukin still had 6 trillion yen of asset-backed securities at the end of December

> Taken from their Presentation Of Capital Positions. For more updates visit their News Release Overview.

‘Material’ Pressure
Standard & Poor’s cut Norinchukin’s financial-strength rating in December, citing “material” pressure on capital. The bank had a Tier 1 consolidated capital-adequacy ratio of 6.83 percent under Basel II standards as of Dec. 31, down from 9.39 percent as of March 31, it said in a statement today.

Profit at the Tokyo-based bank, which was founded in 1923 and makes loans to farmers and fishermen, plunged 95 percent to 7.8 billion yen in the six months ended Sept. 30, from 143.6 billion yen a year earlier, as it posted an 81.5 billion yen loss on asset-backed securities.

Norinchukin was founded as a semi-governmental financial institution and was privatized in 1959, according to its Web site. The company had 4,260 shareholders at the end of March, made up of agricultural, fishery, forestry and related cooperatives.

Number Of The Day "Japan´s Export Plunge Record 27 Percent"

WOW! The strong Yen didn´t help......... I expect that the entire currency complex has the potential to become the next "battleground" ( hopefully not combined with "trade wars" see Has Beggar Thy Neighbor Started? via Naked Capitalism & The Major Risks for 2009: Tariffs, Wars, Currency, etc. from Merrill Lynch's David Rosenberg via Infectious Greed)........ The race to the bottom is already underway..... Let´s hope that we won´t see a crash of a major currency ( british Pound )...... At least there will be always a bull market ( one weak vs another less weak currency)..... Got Gold......?

Donnerwetter! Bleibt zu hoffen das wir als vergleichbare Exportnation etwas besser abschneiden...... Denke den Japanern wird gerade jetzt der erstarkte Yen nicht sonderlich gefallen..... Ich befürchte das uns das Thema Wechselkurse in den kommenden Jahren desöfteren heimsuchen wird ( hoffnetlich nicht auch in Form von "Handelskriegen" siehe auch Has Beggar Thy Neighbor Started? via Naked Capitalism & The Major Risks for 2009: Tariffs, Wars, Currency, etc. von Merrill Lynch's David Rosenberg via Infectious Greed)...... Der Versuch die Währung möglichst schwach zu halten ist weltweit bereits im vollen Gange. Ich würde mir nur wünschen das wir das ohne Kollaps eine der größeren Währungen überstehen. Denke da besonders an das britische Pfund...... Immerhin ermöglichen diese Märkte immer einen garantierten Bullenmarkt ( schwache vs einer wenigen schwachen Währung ) ...... Got GOLD?

Thanks to Bespoke

Japan Exports Plunge Record 27% as Recession Deepens Dec. 22 (Bloomberg) -- Japan’s exports plunged the most on record in November as global demand for cars and electronics collapsed, signaling more factory shutdowns and job cuts are likely as the recession deepens.

Exports fell 26.7 percent from a year earlier, the Finance Ministry said today in Tokyo. That was more than the 22.3 percent decline estimated by economists and the sharpest since comparable data were made available in 1980.

Shipments to the U.S. slid an unprecedented 34 percent and sales to China slumped the most in 13 years

The government today lowered its assessment of the world’s second-largest economy, saying it’s “worsening” for the first time since 2002. Gross domestic product shrank in the past two quarters, sending Japan into its first recession since 2001.

Toyota, Honda Motor Co. and Sony Corp. are among the companies that are shedding thousands of workers and closing production lines as profits dwindle. Car exports slid 32 percent last month, the most ever, and semiconductors slumped 29 percent, the ministry said.

UPDATE : Toyota Forecasts First Operating Loss in 71 Years on Yen, Sales

Compounding the drop in demand is the stronger yen, which erodes overseas profits. Every 1 yen gain against the dollar and euro trims Toyota’s annual operating profit by 40 billion yen and 6 billion yen, according to the company. The carmaker in November based its second-half earnings outlook on 100 yen to the dollar and 130 yen to the euro.

Today’s report showed the global recession is spreading to the emerging markets that propped up exports as demand from the U.S. and Europe evaporated. Exports to Asia fell 27 percent, the most in 22 years. Shipments to China, Japan’s largest trading partner, tumbled 25 percent, the steepest decline since 1995.

Exports to Europe slid 31 percent, the second-most ever.