Blood in the financial streets...

Pablo Neruda wrote on the Spanish Civil War...
"Come and see the blood

In the streets! "

Coming events cast their shadow long before...

When the banks heaved, we should have sighed at what was coming.

Is it over? 

Not as yet. The agony is not as yet abated. 

If the Chinese bamboos turn dry and wilt, them trader animals have nowhere to hide. 

If the Bank of Japan  seeks out negative interest rates; why can't we be pessimistic? 

Quarterly results of Indian  banks are so frustrating , but then there is yet another quarter to go....

The bears have  golden swords...  

The sidelines are the best places to be there...

This blog recommends no investment. These views are expressed without any risk or responsibility. 

Cheaper Yen, Jap Companies Cheer

Japanese companies were upbeat. Some relief in a Greece induced gloom world.


Tankan Explained : (source :Bank of Japan) https://www.boj.or.jp/en/statistics/outline/exp/tk/extk03.htm/#p01

1.Purpose of survey

The Tankan is a statistical survey by the Bank of Japan in accordance with the Statistics Law (Law No. 53 of 2007). The survey is conducted to provide an accurate picture of business trends of enterprises in Japan, thereby contributing to the appropriate implementation of monetary policy.

2. Survey method

The answer sheet is returned by mail or online. The Bank of Japan is obliged to keep confidential information obtained from respondents under strict security control in accordance with the Statistics Law.

3. Frequency of survey

The survey is conducted quarterly in March, June, September, and December. The survey results are released at the beginning of April, July, October, and mid-December in principle (released at 8:50 a.m. Japan Standard Time). The release dates for the next one year are announced in advance at the end of June and December.

4. Coverage

(1) Tankan

The population of the survey is approximately 210 thousand private enterprises (excluding financial institutions) in Japan with at least 20 million yen in capital, based on the "Economic Census for Business Activity" jointly conducted by the Ministry of Internal Affairs and Communications and by the Ministry of Economy, Trade and Industry in February 2012.

Japan Sun Rising.... Abenomics? Read Wall Street Journal Blog

According to a Wall Street Journal Blog, Japan seems to be seeing light at the end of the tunnel.

http://blogs.wsj.com/japanrealtime/2015/02/16/growth-data-show-signal-of-inflation-for-first-time-in-17-years/

Growth Data Show Signal of Inflation for First Time in 17 Years

By Mitsuru Obe

(Without any risk or responsibility) 

The insignificance of being OPEC...

OPEC's key official, addressing a news conference  in Dubai, stated that oil price fall was not in keeping with the fundamentals.   (http://in.reuters.com/article/2014/12/14/us-opec-oil-badri-idINKBN0JS06F20141214). 

He is not powerful enough to talk up the oil price. With Saudi Arabian strategy for a supposed market share, not going anywhere; and with Chinese slow down, oil prices have nothing to shield it from further falls. The West will also be happy to see the pressures on a defiant Russia. The Saudi lead in not prescribing a cut, also appears  indirectly  aimed at Iran as the latter  country will reel under the price fall; s Saudi Arabia has quite a large quantum of national reserves as a cushion; Iran does not have much staying power. Given the desperation of the non- reserve holding oil producers, to maintain revenues,  there will be quite a glut in the market in the coming week. Imagine Nigeria, Angola, Venezuela and similar!

The Japanese election results surprise none; it had already been factored in by the markets. The unpleasant surprise is the lower than usual turnout, which ignites cynicism in some measure and dampens Abenomics. So the results are not potent enough to trigger a move up.

It looks set of short on oil.

The Internet of Things will drive a bull market.

1. Abeonomics is on despite temporary setbacks; 
2. US economy is throwing out the right signals: just enough to keep interest rates high and just right to have no worries on prices;
3. Europe's Central Bank seems to assimilate the benign effect of QE;
4. China will grow , continue to grow and will lead in growth figures despite all its slow down worries;
5. Indian reforms are back on track; although India is far behind China, it is seriously for once, trying to make a dash for it;
6. Technology is helping corporates with enhanced productivity.
7. The Internet of Things will keep on lifting the markets...

Looks set for a buyer's day?

Global Equity markets are as optimistic as one can be in the given circumstances:
a) Japan is going to polls;
b) Bank of Japan has to expand money supply;
c) Japan has to delay taxing, which means real incomes are better off;
d) India looks for a strong reform agenda;
f) Oil prices look set south further;
g) Dollar is rising showing inward flows in to USA;
h) With dollar's rise middle east economies outward buying is enhanced so the European and Asian suppliers are likely to benefit.

Dollar high; gold slipping further;
Emerging markets, will they see a rush to the Wall Street?

Great revival

Abeonomics is back in focus as Japan goes to polls again. Will the ruling party win with  the writ and vigor to carry forward? In any case, markets cannot be worried, because Japan cannot get any worse. In fact QE  seems inevitable.

US producer inflation is indicative of a great revival after the great recession.  With ECB  too looking to QE the world looks stimulus led growth for the great revival. .,

Bull run expectation reinforced.

Abenomics should see Japan through. Efforts are on to weaken the yen, revive profits and help restore confidence in the economy. There are blips  like the technicality of recession; but then the Japanese economy has been on a 'price harakiri' since 1990s. Price falls have hollowed out Japanese manufacturing.
So stimulus has to be on: we really are looking at softer interest rates for quite a few months from now on. So Gold is again picking up. The strengthening of the Euro , is however a cause for concern for the Europeans. US economy would benefit and hence Wall Street should do well.