Japan Plans To Buy $227 Billion In Shares To Boost Market

[Sapiens]

http://www.foxbusiness.com/story/mar...-boost-market/

NEW YORK -- Japan's government said Thursday it is submitting a bill to parliament allowing for the purchase of 20 trillion yen ($227 billion) in stock to help stabilize the Japanese stock market, Kyodo news reported. Under the bill, the Banks' Shareholding Acquisition Corporation, originally created in January 2002, would resume buying shares from banks and other entities, the Japanese news agency reported. The bill would be introduced early next month "with an eye to implementing the measure by the end of March," the report quoted lawmakers as saying. The Liberal Democratic Party had intially considered just 10 trillion in stock purchases, but the size was roughly doubled to 20 trillion yen at the request of its ruling coalition partner, the New Komeito party, the report said.

[FRED]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

http://www.foxbusiness.com/story/mar...-boost-market/

That would explain the sudden rise in the Nikkei.

[jtabeb]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

That would explain the sudden rise in the Nikkei.

Wonder how soon that happens here?

[GRG55]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

Wonder how soon that happens here?

"...Under the bill, the Banks' Shareholding Acquisition Corporation, originally created in January 2002, would resume buying shares from banks..."

As I recall the Treasury is already buying "shares from banks". Of course those shares happen to be preferreds; and represent equity in the banks [and insurance companies] themselves. But I am sure you would agree, that seems close enough for government work...:p

And there's also the persistent rumours, going back a couple of decades, of the existence of the PPT.

[buljong]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

Wonder how soon that happens here?

ha ha ha
it happened EVERYDAY for the last 21 years in the US
now the Japanese are getting bored with the PPT and needs a kick....


ha ha ha
pure kindergarden

[LargoWinch]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

My bet is that this "missing" $2 Trillion is in use to support US indices...


Fed Refuses to Disclose Recipients of $2 Trillion
By Mark Pittman

Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.

...more

Article link:
http://www.bloomberg.com/apps/news?p...iiM&refer=home

[ASH]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

My bet is that this "missing" $2 Trillion is in use to support US indices.

I thought perhaps it was covering losses on CDS and other derivatives. We know the banks have that problem, and we also know that the bailout has been sold to the public in terms of "making money available for loans" and possibly "lowering mortgage rates." Now, it's true that if the banks can't cover their bets, they go out of business and they won't be there to generate credit. However, that's sufficiently indirect that J6P is likely to look on shoveling public money into the gaping derivatives hole with a jaundiced eye. Right now J6P thinks that the $85 billion (or whatever) AIG bailout is of this nature -- throwing money into a hole. I don't think J6P realizes how much of the rest of the bailout money is being used for roughly the same thing. The authorities are doubtlessly concealing this because the political reaction would complicate execution of what they think they have to do.

Incidentally, I find the notion of surreptitiously spending $2 trillion in the course of a few months to buy shares -- shares whose ownership must be accounted for -- problematic.

[LargoWinch]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

Incidentally, I find the notion of surreptitiously spending $2 trillion in the course of a few months to buy shares -- shares whose ownership must be accounted for -- problematic.

Interesting ASH.

Regarding the above comment, that would be true if we had free markets, which I am unsure we are witnessing at the moment.

Days when the Dow is down 500pts and close higher by 600pts in the last 35 min. of trading on a Friday smells and looks like manipulation to me...

[ASH]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

Interesting ASH.

Regarding the above comment, that would be true if we had free markets, which I am unsure we are witnessing at the moment.

Days when the Dow is down 500pts and close higher by 600pts in the last 35 min. of trading on a Friday smells and looks like manipulation to me...

I can understand that sentiment, but I just don't see how the details would work. Correct me if I'm wrong, but I think the reason we know there's a "missing" $2T is because money was given to banks -- and that was documented. What wasn't disclosed is what the banks then did with the money. If they sunk it into the stock market, then shares changed hands, and ownership of shares is closely accounted for. That's something we'd find out about rather quickly. (The stock market is subject to more regulation and is more transparent than the market in derivatives, which is partly why I think that's where the missing money went -- it's the least transparent market I know of, and therefore the most likely place for hidden transactions totalling trillions of dollars.) Then there's also the question of motive -- the banks quite clearly have a solvency problem, so my first thought is that any money the public gives them would tend to go to solving the immediate solvency problem rather than engaging in stock market manipulation. In particular, if you are on the verge of going bankrupt and you receive a cash windfall, do you (a) pay off your debts so you can stay solvent, or (b) plow the windfall into an asset in order to temporarily raise its price level, knowing full well that the price rise is the result of your manipulation, and knowing that once your temporary manipulation runs its course, you'll still have your solvency problem? My take is still that the secrecy means the nature and magnitude of the solvency problem is both disturbing and embarrassing, and that the derivatives market is the only place you could drop $2T without creating ripples.

[whatnow]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

What I keep wondering about is do most activities actually happen "above board" in the financial sector. With tin foil hat firmly in place, is it difficult to make the leap that insiders (market makers, specialists etc.) can be surreptitiously funded to basically ladder prop job trades with wink and a nod from the powers that be? I guess my instinct is that if a market is supposedly transparent to outsiders, it makes me think that I'm only seeing what is allowed to be seen. I guess I'm just an untrusting, paranoid bastard at heart.

As an aside, it's obvious that the SEC and CFTC couldn't find find their own asses even with their head jammed up 'em, but it seems almost too obvious. It seems that playing dumb has payed off for way too many people for far too long.
Just wondering....

[ASH]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

With tin foil hat firmly in place, is it difficult to make the leap that insiders (market makers, specialists etc.) can be surreptitiously funded to basically ladder prop job trades with wink and a nod from the powers that be?

My position is that there are too many players -- and the stock market is too close to being a zero sum game -- for such a conspiracy to work.

Obviously, there are a lot of big participants trading in the stock market. Most of the wealth gained from the market results from trades in which there is a net winner and a net loser -- for every winner who buys low and sells high, there is another loser on the other side of the trade. The money at stake means that a multitude of large, well-staffed market participants have an interest in watching the market, and the zero-sum nature of the game means they can't all be on the same side in a conspiracy and still make money.

[whatnow]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

Thank you for your reply, and I do agree with your basic tenant except that what I am implying is there no impetus for the perpetrators of such a possible scheme to make money. The purpose is for stabilization and damage control. I have read that supposedly this can be done through manipulation of the futures market but that seems rather one sided and unwieldy as well.. Wouldn't it be prudent for a propping endeavour to take an interest in the underlying shares as well? To me the almost Pavlovian responses to squiggly lines on a chart that market participants react to, could inspire entities with large bankrolls to embark upon a more granular level of manipulation of the market, not for profit, but for survival.

I apologize if my thinking is too wacky, but I don't believe in the concept that just because the game is large it doesn't mean it can't be controlled for short and important periods of time.

[ASH]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

Thank you for your reply, and I do agree with your basic tenant except that what I am implying is there no impetus for the perpetrators of such a possible scheme to make money...

I apologize if my thinking is too wacky, but I don't believe in the concept that just because the game is large it doesn't mean it can't be controlled for short and important periods of time.

A lot of my argument relies upon assumptions about the motivations of the bailout recipients, and also market participants. If I'm wrong about who got the money (banks), what their problem is (solvency), and where their interests lie (solvency), then I'm wrong about what they likely did with that money (cover losses on derivatives). Further, if I'm wrong about the motivations of the other major market participants (making money), then I'm wrong about their motivations to scrutinize major market irregularities. I invoked the size of the market, and its zero-sum nature, to explain why the market participants couldn't all profit from being "in on it", and why those not in on the scheme would be motivated to expose it -- not as a more general "it's too big to manipulate" argument.

That said, this really only amounts to my opinion about plausibility. I'm a good long way from telling anyone else that they are crazy for believing otherwise. Also, this is an argument specifically against the $2T of bailout money being used for stock market manipulation.... not an argument against TPTB engaging in stock market manipulation by other means with other funds.

Besides -- someone on this site has to be doggedly skeptical of more than banal manipulation. The tinfoil hat crowd needs a foil.

[LargoWinch]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

ASH you are making a lot of sense there.

I am not an expert on derivatives, but I imagine there could be a way for the FED to "recommend" that banks:

a) Take the money to remain solvent

b) Take some of that money and support the markets via synthetic products?

Again, I am no fan of conspiracies and prefer to look at facts. This "support the market" comment is obviously pure speculation and find it more entertaining than anything else.

Having said that, time will tell, but my feeling is that US tax payers won't be happy with this $2T investment from the FED once details are made available...

[ASH]

Re: Japan Plans To Buy $227 Billion In Shares To Boost Market

Having said that, time will tell, but my feeling is that US tax payers won't be happy with this $2T investment from the FED once details are made available...

I'm thinking that by the time details are made available, $2T might seem like pocket change? There's a scary thought! ;)

FWIW, I don't regard you as a conspiracy theorist. I think we're just two guys pondering the more likely misuse of public money.