Bank of Japan to Pump $1.4 Trillion Into Economy

[shiny!]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

The diesel cars are blocked because the air emissions standards in 4 of the Lower 48 US States, including California, are higher than Europe. Only the very high end European diesel manufacturers such as Audi, BMW and Mercedes, with its BlueTEC diesel engines, have the capability of investing in the R&D to meet the USA standards because they are able to pass on that cost to the buyers of such expensive vehicles. The mass market European manufacturers generally cannot do that.

These State air emissions standards are part of what is driving an "American" solution different from Europe...subsidized electric vehicles such as the Volt, Leaf, Tesla, Fisker, etc.
So how does it feel to subsidize the rich and famous? :-)

it doesn't feel so good.

So these 4 state air quality standards... how far off are they from what the basic European high MPG diesels can do? Like the European Ford Focus? Are they radically more strict, or just a little bit more strict? If only a little bit different, maybe pressure can be brought on those states to modify their air laws so as to allow these cars to be built and sold in the USA?

Do we have enough diesel refinery capacity to fuel a lot of diesel cars? Because it is ridiculously hard to get approval for new refineries...

[GRG55]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

it doesn't feel so good.

So these 4 state air quality standards... how far off are they from what the basic European high MPG diesels can do? Like the European Ford Focus? Are they radically more strict, or just a little bit more strict? If only a little bit different, maybe pressure can be brought on those states to modify their air laws so as to allow these cars to be built and sold in the USA?

Do we have enough diesel refinery capacity to fuel a lot of diesel cars? Because it is ridiculously hard to get approval for new refineries...

Not a complete answer to your questions but some facts to provide some insight:

1) Since mid-2010 the USA has consistently exported between 700,000 and one million barrels per day of distillate fuels, which includes diesel.

2) NOx (nitrogen oxide) emission standards are the greatest difference. The EPA 50 state standard is 0.07 grams per mile. The EU standard is 0.29 grams per mile. To overcome this engines like the Mercedes BlueTEC sold in the USA inject an aqueous urea/ammonia solution into the engine exhaust just upstream of a second catalytic converter which converts most of the NOx into nitrogen and water vapour. The urea solution has to be refilled regularly and costs about $15 a gallon (8 gallon tank) plus labor at each servicing. By the way, the EPA has been testing biodiesels, and although they seem to show reductions in some pollutants it seems that they may emit greater levels of NOx than petroleum based diesel fuels.

3) The US Federal diesel tax is about 6 cents a gallon more than the tax on gasoline.

Toyota, Honda, Ford and GM have all considered bringing small diesel vehicles that they build internationally into the USA but so far I think only VW/Audi has a small, affordable diesel in the US passenger car market. All the other available diesel cars are higher end luxury vehicles. I think EJ has a diesel car that replaced his gas guzzling AWD SUV a year or two ago.

The barriers are so high that a few years ago when Daimler decided to expand the marketing of their urban Smart car into the USA (they had only been selling them in Canada) they decided to replace the efficient little diesel engine with a gasoline engine for all North American marketed Smart cars. Up here in Canada the used diesel variant that is no longer available commands a premium on the used car market.

[ProdigyofZen]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

Not a complete answer to your questions but some facts to provide some insight:

1) Since mid-2010 the USA has consistently exported between 700,000 and one million barrels per day of distillate fuels, which includes diesel.

2) NOx (nitrogen oxide) emission standards are the greatest difference. The EPA 50 state standard is 0.07 grams per mile. The EU standard is 0.29 grams per mile. To overcome this engines like the Mercedes BlueTEC sold in the USA inject an aqueous urea/ammonia solution into the engine exhaust just upstream of a second catalytic converter which converts most of the NOx into nitrogen and water vapour. The urea solution has to be refilled regularly and costs about $15 a gallon (8 gallon tank) plus labor at each servicing. By the way, the EPA has been testing biodiesels, and although they seem to show reductions in some pollutants it seems that they may emit greater levels of NOx than petroleum based diesel fuels.

3) The US Federal diesel tax is about 6 cents a gallon more than the tax on gasoline.

Toyota, Honda, Ford and GM have all considered bringing small diesel vehicles that they build internationally into the USA but so far I think only VW/Audi has a small, affordable diesel in the US passenger car market. All the other available diesel cars are higher end luxury vehicles. I think EJ has a diesel car that replaced his gas guzzling AWD SUV a year or two ago.

The barriers are so high that a few years ago when Daimler decided to expand the marketing of their urban Smart car into the USA (they had only been selling them in Canada) they decided to replace the efficient little diesel engine with a gasoline engine for all North American marketed Smart cars. Up here in Canada the used diesel variant that is no longer available commands a premium on the used car market.

Grg EJ has a bmw 335d the diesel bmw they made. They stopped making it for 2013 but they are coming with six new diesels in 2014. They don't make a 5 series diesel in the US.

I have the same vehicle it is an absolute tank where I get about 400 to 450 miles on a full tank combined city/highway.

[shiny!]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

Not a complete answer to your questions but some facts to provide some insight:

1) Since mid-2010 the USA has consistently exported between 700,000 and one million barrels per day of distillate fuels, which includes diesel.

2) NOx (nitrogen oxide) emission standards are the greatest difference. The EPA 50 state standard is 0.07 grams per mile. The EU standard is 0.29 grams per mile. To overcome this engines like the Mercedes BlueTEC sold in the USA inject an aqueous urea/ammonia solution into the engine exhaust just upstream of a second catalytic converter which converts most of the NOx into nitrogen and water vapour. The urea solution has to be refilled regularly and costs about $15 a gallon (8 gallon tank) plus labor at each servicing. By the way, the EPA has been testing biodiesels, and although they seem to show reductions in some pollutants it seems that they may emit greater levels of NOx than petroleum based diesel fuels.

3) The US Federal diesel tax is about 6 cents a gallon more than the tax on gasoline.

Toyota, Honda, Ford and GM have all considered bringing small diesel vehicles that they build internationally into the USA but so far I think only VW/Audi has a small, affordable diesel in the US passenger car market. All the other available diesel cars are higher end luxury vehicles. I think EJ has a diesel car that replaced his gas guzzling AWD SUV a year or two ago.

The barriers are so high that a few years ago when Daimler decided to expand the marketing of their urban Smart car into the USA (they had only been selling them in Canada) they decided to replace the efficient little diesel engine with a gasoline engine for all North American marketed Smart cars. Up here in Canada the used diesel variant that is no longer available commands a premium on the used car market.

Thank you, Sir. I appreciate your knowledge and willingness to share.

[Chomsky]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

This thread could have been titled "Kyle Bass gets his ass handed to him by the Bank of Japan."

This is exactly why we are never short the balance sheets of central banks.

If Bass has any money left by the time the BoJ does run into trouble in, say, 2019, it won't be enough to offset his losses up to that time.

Advice to Bass: Short the yen, long the Nikkei, fine, but the BoJ's balance sheet is bigger than yours. Don't short it.

Edward Harrison with a couple of good tweets:

Edward Harrison @edwardnh5m
Bass Sees `Beginning of the End' for Japanese Bonds: Video - Bloomberg http://ow.ly/jU36F I'm not seeing this

Edward Harrison @edwardnh3m
Bass says he was right on Japan: "the stress is beginning to show". Come again? Yields are at record lows. 30 has dropped 56bps in last year

Edward Harrison @edwardnh3m
In Japan, the 5-year is down 10 basis points, the 10-year 44 basis points and the 30-year 56 bps points in the last year. Where's the stress?

[Chomsky]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

Edward Harrison with a couple of good tweets:

Edward Harrison @edwardnh5m
Bass Sees `Beginning of the End' for Japanese Bonds: Video - Bloomberg http://ow.ly/jU36F I'm not seeing this

Edward Harrison @edwardnh3m
Bass says he was right on Japan: "the stress is beginning to show". Come again? Yields are at record lows. 30 has dropped 56bps in last year

Edward Harrison @edwardnh3m
In Japan, the 5-year is down 10 basis points, the 10-year 44 basis points and the 30-year 56 bps points in the last year. Where's the stress?

And a post:

http://www.creditwritedowns.com/2013...ese-bonds.html

[ProdigyofZen]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

And a post:

http://www.creditwritedowns.com/2013...ese-bonds.html

I have been saying this for awhile. JGB prices are up and yield down a lot the last year.

I remember Bass told me, all you have to do is watch the 10 year JGB rate to see if there is going to be trouble in Japan.

I guess he forgot his own statement.

FT article on Japan: http://www.ft.com/intl/cms/s/0/7ed10...#axzz2PyiqYKmj

[ProdigyofZen]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

A disciple of Milton Friedman I see

“Let us suppose now that one day a helicopter flies over this community and
drops an additional $1000 in bills from the sky, …. Let us suppose further that
everyone is convinced that this is a unique event which will never be repeated,”
--Milton Friedman; 1969 --

Now if we could just convince Ben...

More drum beats coming from Bass: http://www.bloomberg.com/news/2013-0...s-telling.html


"Bass said he began publicly sharing his forecast of a collapse in Japan’s government-bond market in 2010. He has acknowledged that other bond investors have nicknamed his short position the “widow maker” since betting against the Japanese bond market to date has been fruitless.
“When I started sharing our views more globally it was the middle of 2010,” Bass said. “I said I believed the stress was going to show itself in the next three years. It’s pretty much three years in, or close, and the stress is beginning to show.”
Bass said in January he’s buying bearish options that are “way out of the money” to bet against Japan. Should the trade work, the payout will be “much better” than that of his wager against subprime mortgages, he said in today’s interview.
“In subprime, we thought about losing 11 percent a year and making 10 times our money,” Bass said. “In this one we think about losing 1 to 2 percent a year in this strategy and making 300 to 400 times our money.”
"

So it has been at least 3 years since he started putting on Japan bets......

[GRG55]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

More drum beats coming from Bass: http://www.bloomberg.com/news/2013-0...s-telling.html


"Bass said he began publicly sharing his forecast of a collapse in Japan’s government-bond market in 2010. He has acknowledged that other bond investors have nicknamed his short position the “widow maker” since betting against the Japanese bond market to date has been fruitless.
“When I started sharing our views more globally it was the middle of 2010,” Bass said. “I said I believed the stress was going to show itself in the next three years. It’s pretty much three years in, or close, and the stress is beginning to show.”
Bass said in January he’s buying bearish options that are “way out of the money” to bet against Japan. Should the trade work, the payout will be “much better” than that of his wager against subprime mortgages, he said in today’s interview.
“In subprime, we thought about losing 11 percent a year and making 10 times our money,” Bass said. “In this one we think about losing 1 to 2 percent a year in this strategy and making 300 to 400 times our money.”
"

So it has been at least 3 years since he started putting on Japan bets......

It doesn't pay to mess with Mother Nature...or the BoJ

Frankly, I think the real "thermonuclear warmongering" going on in the North Pacific is coming out of Tokyo, not Pyongyang

[ProdigyofZen]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

It doesn't pay to mess with Mother Nature...or the BoJ

Frankly, I think the real "thermonuclear warmongering" going on in the North Pacific is coming out of Tokyo, not Pyongyang

Yea, I have to tune out this North Korean and Iranian rhetoric it is ridiculous. What are these countries going to do? It is ludicrous to think that North Korea will do anything besides be a puppet for China.

This is not Olympus has Fallen.......

[llanlad2]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

We have an economic model all around the globe on which growing GDP is dependent on growing consumption from a growing population. If Japan can export to Egypt it will be fine...

That's why I think Japan will be fine. Whatever the new economic model is I'm pretty sure it won't be dependent on growing GDP. And even with the current model it doesn't justify Bass's stance that falling population = bond crisis.

[gwynedd1]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

A disciple of Milton Friedman I see

“Let us suppose now that one day a helicopter flies over this community and
drops an additional $1000 in bills from the sky, …. Let us suppose further that
everyone is convinced that this is a unique event which will never be repeated,”
--Milton Friedman; 1969 --

Now if we could just convince Ben...

I do not quite see a monetary surface area comparison like I made. However it always seems to be missing whenever I see "money printing". In the hands of a few its more like a power metric. In the hand of many its a consumption metric. Its just no terribly sophisticated to say money is being created.

[charliebrown]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

I don't think it is thermo-nuclear-war, but what it the next step? N.K. fires its missile. Now that the U.S. has raised the rhetoric, do they just sit and watch, or do they try to take a shot at it? What if they blow it out of the sky? Then what? Is the U.S. "Man" enough to just let it splash into the ocean? Suppose the trajectory is over Japan? Do the Japanese just let it fly over?

[don]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

Only the Korean people want to see the peninsula re-united. Not Russia, China, the US or Japan. At the present time South Korea alone could probably overrun the north. Last thing any of the above want. North Korea is an on-call distraction, whenever the US wants one.

[astonas]

Re: Bank of Japan to Pump $1.4 Trillion Into Economy

Only the Korean people want to see the peninsula re-united. Not Russia, China, the US or Japan. At the present time South Korea alone could probably overrun the north. Last thing any of the above want. North Korea is an on-call distraction, whenever the US wants one.

I agree generally. But isn't it serving China's interests far better as a distraction than the others?