HiSlangeandall,
Iagreethe JapanesebondmarketisalongwayfromafreemarketI believe the governmentownaround70%ofthebonds.
I thinkifweseethe Japanese 40-yearnotegoabove4%itmaystarttheconflagration worldwide.
I tryandwatchforthepointersforwhentoexpecttoseetheexcreta hittherotaryairmovingdevice.
Butamancan’tbeeverywhereandcoverallbases;however,inmycaseit’sjustfor interest. I believe I havedoneasmuchasIcanbyholdingphysicalGoldandSilverandhavingacoupleofbolt -holesindifferenthemispheres (savingupforMarswithElon.)forwhentheinevitable happens.
I hadnoparticular skininthegame,butIhadthoughtthenextbigbanktofailwouldbeDeutscheBank,butwhilstlookingthatway2023Iwassurprised thatitwascreditSuissethatblewupbehindme!
Beingwrongin2023caused menofinancial loss;however,perhapsIwasnotincorrectmerelyalittleearly. Deutsche Bankhas foralongtimehad agreatdealofexposuretocommercialrealestateandtheGerman autoindustryandaswenowknowbothofthesesectorsareseeinghighlevels ofstress.
AtthisstageIguesswedon’tknowexactlywhatdirection thenextfinancialcrisis willstartfrom. ItcouldbeJapanese40-yearbondsat4%aEuropeanbustupaUkbankandpensionexplosionorevensomethingwearenotremotelyaware of.
Onethingwemayneed toconsiderisfromtheitem linkedbelow. With UncleSamlookingto settleandre-sellsome7-9Trillionofdollarsoftreasurydebtduring2025havingtodosoatabove5%fortheten-yearnotemaybeproblematic.
ThisMoody’sdowngrade(and timing)lookstomelikeaseverekickinthe orchestrastallsfor thecurrentadministration. Icertainlydon’tthinkMr. Trumpandtheboyswill be veryhappywiththisnews. Withtariffsonthendelayed thenoffagainIwouldnotbesurprisedtoseeyetanotherU-turndecisionregardingthemanholdingthereinsdownattheFederalReserve.
May16 (Reuters) - Moody's downgraded the U.S. sovereign credit rating on Fridaydue to concerns about the nation's growing, $36 trillion debt pile, in a movethat could complicate President Donald Trump's efforts to cut taxes and sendripples through global markets.
Moody'scuts America's pristine credit rating, citing rising debt | Reuters
AnotherinterestingfactfromtheUSAisregarding how thecompaniesareusingtheirmassedprofits gainedfromtheiroffshoringofmanufacturingjobstoChina.
These verylargeamountsofdollars couldbeputtoomanyuses.
Theycouldbeissuedtoshareholdersasdividendsorusedforresearchanddevelopmentoracquiring otherassetsandthusgrowingthecompanyandincreasingtrueshareholdervalue.That’sthekindofthingonewouldseeinChina.
However,manyoftheUScompaniesprefertousetheseobscene profitsforsharebuybacks.Reducingthenumberofsharesonissuewillincreasethesharepriceandensurethedirectorslooklikemasterminds andworthyoftheir salaries andbonuspackages!
In2024IreadthattheS&P500companiesspentarecordof$942.5Billiononsharebuybacks.This surpassesthe previous 2023$795.2Billionfigure!
AsIsaygreatdealforthedirectorsbonusesbutnotsogreatforshareholdersandcompanyemployees.Onecanonlyguessthathadthat942.5BillionDollarsbeenploughedbackintobusinesshow manynewhighpaidjobstheremight be today!
Personally,I thinktheseshortsightedactionsofthe headsofthesecompaniesand ofwesterngovernmentsgenerallyarenotserving theircitizens wellat all.OnethattrulygripesmefromtheAustralianperspectiveistheoutrightrejectionoftheChineseBeltandRoadInitiative.
Notetoanypoliticiansreadingthesethreadstoastapiece ofbreadbutteritononesidethendrop it fromabouta meterhigh,notehowitlandsgenerallyitwilllandbutterdownanddrysideup.Rememberthisexercisewhenmakinganycrucialpoliticaldecisions ( Think B&RI) becauseinmy opinionyouguyshaveyettofathomoutjustwhatsideyourbreadisbutteredon.
TheChinaswitchawayfromsoybeansfromtheUSAtoBrazil wasprobablynotallthateasy;however,itisnowa done deal.LikewiseAustralianIronOrecouldbelosttoothersuppliersdueto moreincompetenceinCanberra.
Theydon’tbuildthesecapeclassbulkcarriesfornothing.!!!
170capesize bulkers needed to ship iron ore from world’s biggest new mine project,analysts say | TradeWinds
Talkaboutlivingininterestingtimes!Cheers