Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

George....

There are several reasons that the JGB's could be weak, and the idea that "the outlook for the Nikkei has greatly improved" is not necessarily one of them - personally, I don't think it is. Bernanke gave a speech over there that enumerated several potential problems and I think there was a recent Fed white paper on the subject. I would think that the weakening balance sheet of the BOJ is one reason, along with several other risk factors (like the BOJ being determined to weaken the value of the Yen and the deteriorating economy) that are not at all compensated for at recent ultra low rates. If the rapid decline in the JGB's continues, you can kiss the Nikkei good-bye - and the same is true here if our bond markets tank.

I remain quite negative on the Japanese economy and markets.

mlsoft