Tawdry Tuesday – BOJ and Sweden Put More FREE MONEY on the Fire

October 28, 2014 at 08:03 AM EDT

More free money today as Japan backs off their tax hike and Sweden cut rates to ZERO . Don't worry, Japan isn't going to take that lying down and their 3-month bills are now -0.037% and, you may wonder who the Hell would buy those but the BOJ is buying those securities from the banks for -0.15%, so the banks that buy the 3-month bills are able to flip them for a 4x profit a day or two later – isn't that special? Are we reaching peak insanity on Central Bankster Manipulation? Maybe… Japan's 10-year bonds are now 0.46% and 20-years are 1.3%. 2-years are still positive, at 0.005%. “Financial companies know that the BOJ will always buy government debt from them, and that’s part of the reason why bill yields became negative at an auction,” said Kazuhiko Ogata , chief economist at Credit Agricole SA in Tokyo. “The BOJ needs to buy treasury bills as well as JGBs in order to meet its monetary-base target.” Meanwhile, the cost of credit-default swaps on JGBs rose 51 basis points yesterday, back to the year's highs and only Greece is worse to insure than Japan this year as Japan's total debt went up to 1.039 QUADRILLION YEN (that's 1,000 Trillion!). Even Zimbabwe is saying "WOW!" to that number! BOJ policy makers have denied that they are financing government deficits, saying that government bond purchases are aimed at achieving their price target. “It’s becoming obvious that the BOJ’s easing in its current form is not sustainable,” Akito Fukunaga , director and chief rates strategist for Japan research at Barclays, another primary dealer, wrote in a report on Oct. 24. “The BOJ may make technical adjustments to allow unlimited buying of notes maturing in five years or less.” …

More free money today as Japan backs off their tax hike and Sweden cut rates to ZERO.

Don't worry, Japan isn't going to take that lying down and their 3-month bills are now -0.037% and, you may wonder who the Hell would buy those but the BOJ is buying those securities from the banks for -0.15%, so the banks that buy the 3-month bills are able to flip them for a 4x profit a day or two later – isn't that special?

Are we reaching peak insanity on Central Bankster Manipulation? Maybe… Japan's 10-year bonds are now 0.46% and 20-years are 1.3%. 2-years are still positive, at 0.005%.

“Financial companies know that the BOJ will always buy government debt from them, and that’s part of the reason why bill yields became negative at an auction,” said Kazuhiko Ogata, chief economist at Credit Agricole SA in Tokyo. “The BOJ needs to buy treasury bills as well as JGBs in order to meet its monetary-base target.”

Meanwhile, the cost of credit-default swaps on JGBs rose 51 basis points yesterday, back to the year's highs and only Greece is worse to insure than Japan this year as Japan's total debt went up to 1.039 QUADRILLION YEN (that's 1,000 Trillion!). Even Zimbabwe is saying "WOW!" to that number!

BOJ policy makers have denied that they are financing government deficits, saying that government bond purchases are aimed at achieving their price target.

“It’s becoming obvious that the BOJ’s easing in its current form is not sustainable,” Akito Fukunaga, director and chief rates strategist for Japan research at Barclays, another primary dealer, wrote in a report on Oct. 24. “The BOJ may make technical adjustments to allow unlimited buying of notes maturing in five years or less.”

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