BOJ Trade and GPIF Loses

Several articles in Chinese from wechat public account “Tokyo Exchange”.

And a Bloomberg news about the recent GPIF Loses

日银交易—投机者的盛宴

http://mp.weixin.qq.com/s?__biz=MzIxMzUwNTY2MA==&mid=2247483679&idx=1&sn=12410c9ab32db7335b648efd86a3bab4&scene=4#wechat_redirect

2013/4/4 BOJ宣布实行“量的質的金融緩和”(QQE) 每年增加货币基数60万亿 其中55亿通过国债实现

“日银交易”(BOJ trade)是收益率快速下行的一个重要原因

指日本国债玩家通过预判日本央行的购债计划,在财务省发行国债日联手压低价格,并在央行公开购债日抬高价格,赚取差价

スクリーンショット 2016-07-31 19.29.15.png

日债在金融缓和导入初始阶段收益率横亘于0.5%之上 成交量低位徘徊

后受到几个因素影响日银交易开始横行

  1. 13年4月开始的养老金调整资产压缩国债份额的节奏渐缓
  2. 日本央行每月购债稳步推进
  3. 美国加息暂缓,ECB降息
  4. 14年10月份日央行决定追加缓和到80万亿95%购买国债(稳定横扫2年期以上国债发行量90%以上)
  5. 投机参与者间形成有序合作(券商和对冲基金)

Winter is coming?

一旦日本政府通过发行永续债(perpetual bond)来实现直升机撒钱的影响:

  1. 日本央行大概率放弃现有购债计划,并将货币政策转向全面承销永续债,做财政政策的后盾,这将导致现行扭曲的收益率无人接盘
  2. 财务省可能逐渐停止永续债以外的国债发行,券商将失去存在意义,二级市场萎缩
  3. 对通胀的担忧也将重创国债的需求

暴走の国債

http://mp.weixin.qq.com/s?__biz=MzIxMzUwNTY2MA==&mid=2247483676&idx=1&sn=b15d26ccd3ac4a2bc3dbf4697f9aa188&scene=4#wechat_redirect

日央行实现负利率的三条路径

1 QQE

考虑自然到期的国债,日本央行每月购债规模超10万亿,一年120万亿(日本政府每年国债发行总额160万亿)。日本央行资产负债表空前膨胀,持有资产已近GDP的90%。

日央行国债二级市场上公开透明规律的购债操作促进了日银交易,进而人为平稳了波动促进了利率下滑

2 流动性枯竭

日央行买走每年新发债的75%的同时,对一些品种的持有量超过90%

债券回购市场(repo)以一年以上国债为抵押,随着债券流通减少,资金拆解变成债券拆解,回购利率成负值,一年期以下压根没有回购市场,做空即被扎空

3 负超额准备金利率

日银增加的货币基数的绝大部分以准备金的形式躺在日银账上,而并没有经由商业银行已贷款形式流通到市面

黑田于是宣布部分准备金提供-10bp利率

日本金融机构于是横扫一切-10bp以上收益率,导致5y 7y 10y 15y相继落入负收益10y40y大幅收窄

スクリーンショット 2016-07-31 20.21.05

如今日本国债已经完全失去持有利差(carry&rolldown)买入理由只剩下了升值(capital gain)

安倍经济学很成功-我们可能想错了

http://mp.weixin.qq.com/s?__biz=MzIxMzUwNTY2MA==&mid=2247483687&idx=1&sn=d0bc2a1a6c59815f5f1abc9e0737f4ae&scene=4#wechat_redirect

日本的债务

スクリーンショット 2016-07-31 20.27.57.pngスクリーンショット 2016-07-31 20.37.38.png

负债1172万亿 资产680亿 净负债492万亿  (资产以获取价格计)

日本央行

虽然说日本央行独立于政府,但是最大股东还是日本政府

スクリーンショット 2016-07-31 20.38.39.png

436万亿资产中380万亿国债,负债主要是存款(当座預金)和银行券(也就是钞票)

合并两个负债表

国家负债少380万亿国债,增加存款和钞票,央行可以通过创造现金来消化现有的日本国债

同时持续被压低的利率帮助改善政府借钱成本

不通过通胀也可以减少国家债务

World’s Biggest Pension Fund Loses $51 Billion in Stock Rout

http://www.bloomberg.com/news/articles/2016-07-29/world-s-biggest-pension-fund-loses-51-billion-as-stocks-tumble

1x-15

GPIF posts 3.8% investment loss or 5.3 trillion yen for fiscal year ended March, the worst since the global financial crisis

10.8 percent on domestic equities
9.6 percent on shares in other markets
while Japanese bonds handed a 4.1 percent gain

スクリーンショット 2016-07-31 20.59.52

Reason:

Japanese shares sank 13 percent in the year through March while the yen climbed 6.7 percent against the dollar
1x-14

GPIF doubled its allocation to stocks and pared domestic bond holdings since October 20141200x-1

GPIF’s biggest investments in stocks were Toyota Motor Corp. and Mitsubishi UFJ Financial Group Inc. in Tokyo and Apple Inc. outside Japan.
The fund’s largest debt holdings included Japanese government bonds and U.S. Treasuries.

Asset Weightings

スクリーンショット 2016-07-31 21.02.30.png

Almost 80 percent of GPIF’s holdings were passive investments.

The $212 billion Canada Pension Plan Investment Board had a 3.4 percent returnfor the year ended March, with its biggest gain coming from private emerging-market equity investments and real estate.

“They have more than enough room to increase their weighting to Japanese stocks”

“What’s more interesting is how this will be used politically, or even misused.”

Democratic Party of Japan pledged to return GPIF’s investments to safer assets in its election manifesto.

Disappointed market

“At present, nobody quite knows where Japan is going with its monetary policy.”

 

memos of Bloomberg reports on BOJ’s announsment today

 

Disappointed market

Today BOJ plans to pump 2.7 trillion yen a year more into stocks and continue to expand the monetary base by an annual 80 trillion yen government bond buying, then

Japan’s 10-year sovereign yield rises most since 2013
The Topix index initially slid as much as 1.4 percent
The yen surged as much as 2.4 percent

Market expects “helicopter money + a further cut to the negative deposit rate”

The maintained 2% inflation target is no believable as

 “market of strong yen shows real interest rates in Japan are higher than real interest rates in US”

Market believes Kuroda has reached the limit of what he can do without fiscal expansion and demand growing though

Kuroda reiterated that further easing will be done if needed and said the central bank hasn’t hit a policy limit.

Limits or not?

no-win situation

“If they had done nothing, people would have assumed they were giving up on QE. But they don’t want directly financing government debt. So they focused on private assets, not government assets.It was just a question of how to get out of it.”

Limit of NIRP

“the BOJ decided to stay away from a deeper cut to the negative rate because the strategy has been so unpopular, especially with big banks.”

Limit of JGB liquidity

the BOJ now holds more than one third of Japanese government bonds outstanding, contributing to a collapse in yields and a flattened yield curve

Assessment in Sept

Assessment of the effectiveness is quite unusual and might indicate the BOJ “could potentially rip up its current stimulus framework and consider more radical measures, including helicopter money.”

political pressure

the BOJ “succumbed to political pressure” to do something, partly as a result of the government’s announcement of its 28 trillion yen fiscal stimulus package

(poor structural reforms…)

 

1x-131x-12

 

For Japan’s stock market

A 3 trillion yen increase in the BOJ’s ETF holdings was within expectations, but “once they start actually buying the ETFs, the market will gradually rise”

For Japanese investors, the home market has been more rewarding in yen terms than faster-growing emerging markets such as China, India and the Philippines.

(Effect of BOJ’s ETF buying can be doubted if one remember what happened in China one year ago)

However, cheaper credit won’t be enough to boost new investment as bosses and finance chiefs would worry about a further soaring yen.

スクリーンショット 2016-07-29 19.27.00

 

China and Korea as beneficiaries

A strong yen benefits growth countries in the rest of Asia by taking the pressure of other Asia currency against US dollar

“you will see firms like Samsung produce better numbers”

better sentiment for RMB: “the currency is weakening, but no one’s really concerned about it”

 

 

 

Adding a report from Blackrock

How low can interest rates go?

https://www.blackrock.com/investing/insights/fixed-income-monthly

 

Things that drive US rates:

economic performance (towards both sides)

e.g. US surprisingly strong payrolls report for June, short run absence of significant inflation pressure

political uncertainty

e.g. Brexit

global demand for U.S. Treasuries

zero and negative rates in other developed markets make U.S. rates relatively attractive, while shift of foreign Treasuries holders from offical towards private raises hedging costs of currecy risk and reduces attractiveness

limits to QE and NIRP

currency can be printed, but limits exist in the eligible bonds to buy, which force central banks into longer-maturity bond purchases

except helicopter money, little further room for monetary policy accommodation to effectively stimulate the real economy

Kamakura IM‘s “fine company”

Kamakura investment management is an interesting mutual fund in Japan which established in an old Japanese-style house away from array of Tokyo’s modern office buildings and focused only on extra-long term equity investment that bring social contribution.

http://www.kamakuraim.jp/

 

鎌倉投信の投資哲学

短期的な株価の値動きで利ザヤを稼ぐ投機とは一線を画す

投資する先の会社が行う事業やその会社に関わる様々な人によって創造されるほんものの価値豊かさを蓄えて行くものです 

社会に本当に必要とされる価値を創造する会社を見極める眼力
価値を創造する会社の事業を長きにわたって支えようとする想い 

価値観信頼で繋がったお金の循環を創ることができれば、より社会は豊かになり、結果として得られる投資の果実もより良いものになると考えます

 

「いい会社」

1 株式会社エー・ピーカンパニー

3175 MV62億円 PE11.1 PB1.7

「塚田農場」や「四十八漁場」などの居酒屋チェーンの経営を行っています

直営の養鶏場や漁業などから直接仕入れ、その出口として居酒屋を使っています

生産者と消費者が直接繋がって、お互いがメリットを享受できる場づくり

生産者の想いも共有し、それを伝えることができる人財を育てています

売上単価の1割の金額を、何とアルバイト社員が「おもてなし」できる、徹底した権限委譲

鎌倉投信の視点:「人」流行り廃りが激しい外食で百年続く会社になってほしい

 

2 株式会社マザーハウス

非上場会社 社債の引き受け(利率年1%、残存期間10年、格付けなし)

「途上国から世界に通用するブランドをつくる」バッグ等の製造販売

(アジア最貧国といわれる)バングラデシュの自社工場では百六十名の雇用を創出しています

「いいモノをつくる」には働く環境を整える:現地水準よりも高い給与や、企業内ローンなどの福利厚生を整備し、働く人が「第二の家」と感じられる工場を目指しています

現地の人の教育に力を入れ、働く人のやる気を高め、ひいては高品質の維持につながっています

鎌倉投信の視点:「人」現地の人の教育と職場環境の充実に熱心に取り組む姿勢

 

3 サクセスホールディングス株式会社

6065 MV67億円 PE9.9 PB2.7

民間で保育園・保育施設の運営を行っている(二百超保育施設数、雇用する保育者も2千人超)

厚労省が発表する待機児童は2万4千人が、順番待ちしてもしょうがないと認可保育園入園希望を出していない潜在児童は85万世帯ともいわれています
女性の就労にとって必要不可欠となっています。

保育人財の育成に力を入れ、保育の質を向上させるため組織的な研修の充実や労働環境の整備に努めています。数多くの施設を運営しているため、一人一人の保育者のキャリアプランに合わせた職場の提供ができます。

投資先でもある株式会社トビムシが提供する西粟倉の間伐材を使った家具や遊具が保育所内で積極的に導入されています

鎌倉投信の視点:「人」自然共育が、具体的には西粟倉の間伐材を利用した遊具や家具がある環境が、幼児教育に良い影響を与える

Continue reading “Kamakura IM‘s “fine company””

China Update

中国に関するアップデート from Western Asset

http://www.westernasset.co.jp/ja/pdfs/commentary/qa-china_update_201603_ja.pdf

 

ソフトランディング

中国経済が付加価値の低い製造業主導からサービス業および IT セクター主導へと構造転換を遂げる につれて、中国の GDP 成長率は今後数年間 5% ~ 6% に減速すると予想していますが、 ハードランディングする可能性は低いとみています

成長率の減速は、労働者の賃金上昇と人口構成上の逆風を背景に、2012 年以来続いている持続的なトレンドです

国民1人当たりの GDP はなお新 興国の水準にとどまっており
政府は景気のてこ入れのために数多くの政策手段を備えている

 

中国の GDP 成長率鈍化の波及効果

従来、中国のコモディティ需要に大きく依存して きたオーストラリア、ブラジル、南アフリカなどコモディティ輸出国に大きな打撃となって

中国に中間財を輸出する日本や韓国など、中国のサプライチェーンに組み込まれている国も、影響を受けると考えられます

一方、他の国や業界には恩恵をもたらしています

中国における富裕中 間層の台頭を背景に、国外での教育やタイ、英国、オーストラリア、日本などへの国外旅行の需要が増加しています

ベトナムやバングラデシュなど中国と競合する国も、中国が繊維や玩具など一部の低付加価値・労働集約的製造業から撤退したことにより、世界市場でのシェ アを拡大しています

 

中国の金融危機

不良債権が増加していることは確かであり、不良債権の実際の額に関して議論が続いています
(公式発表は1兆 2,700 億元で、融資残高合計の 1.67% に相当)。

中国当局の政策手段

中国の銀行は多額の貸倒引当金を積んでおり、現在それによる不良債カバー率は 1.8 倍を超えています

中国の銀行は、株主資本利益率が 10%台半ばと、世界的な基準で見た場合採算性が極めて高く、年間で約 4,000 億ドルの貸倒引当金繰入前営業利益を上げています

中国の銀行融資は大半に担保(通常、不動 産担保)が設定されており、そのためデフォルトした融資に関わる損失は軽減される

上記の全てが使い果たされた状況に陥った場合、債務が人民元建てであることから、政府が介入し弱体化した銀行に増資を行うと考えられます

 

人民元

ファンダメンタルズの観点からみて

人民元は中国の大幅な貿易黒字と相対的に高い経済成長率を背景に、貿易加重ベースで比較的堅調に推移する

人民元改革の一環として、為替レートの決定に市場要因がより大きな役割を果たす
(中国人民銀行(PBOC)による日次の為替レート基準値設定の仕組みは、単に米ドルのではなく、貿易量に応じた通貨バス ケット制に基づく為替制度に移行していくと見られます)

人民元の国際的地位を高めており(SDR)、世界の外貨準備管理者が徐々に通貨配分の分散を図るに伴って、人民元建て資産に対する需要が中長期的に高ま るとみられます

人民元の大幅な下落(最大 50%)を予想の信憑性には慎重な姿勢

政策当局は主要な投資家に対して通貨の安定性を確約してきたため

中国の資本取引は、最近の自由化にもかかわらず、依 然としてほとんど閉鎖的です

オフショア人民元の流動性プールは、オンショア人民元の流動 性プールの 2% を下回っています

「国際金融のトリレンマ」(ある国が独立した金融政策、固定相場、自由な資本移動の全てを同時に維持することはできないとす る法則)に傾倒する為替投機筋は、オンショア人民元市場にアクセスできないことから、人民元をオフショア人民元の借り入れを行うことから、今後、限定的な流動性プー ルの中でカニバリゼーションが生じ、その結果、調達コストは極めて高くなるとみられます。

中国にとって主要なリスク

国民の間で人民元の信頼性が失われる ことで資金流出が加速すること

政府は資金流出を防ぐために数多くの措置を発表し、その中には海外でのクレジッ トカード取引に制限を課す最近の措置などがあります

投資機会

中国の国内債券市場

分散化を図る良好な機会
先進国債券市場の極めて低い利回 りに対し利回り向上の機会

(中国の債券市場は 7 兆 4,000 億ドルで、世界第 3 位の市場規模を誇っていますが、 中国当局による割当規制から、海外投資家の参加比率は 1.6%と低位に。最近の規制緩和によって、海外機関投資家が中国の銀行間 市場にほぼ全面的に参入できるようになり。世界的に金利が低水準またはマイナスの市場 環境にあって、中国国債の利回りは(現在 10 年債で約 3%)、他の主要先進国を上回る魅力的な 水準となっており)

 

 

Equity Outlook from Janus Capital

Some pictures from Q3 Global Equity Outlook of Janus Capital

https://www.janus.com/insights/ski-report?utm_campaign=Ski_Report&utm_medium=Social&utm_source=Twitter&utm_content=Markets

 

Danger Part:

スクリーンショット 2016-07-26 20.24.19スクリーンショット 2016-07-26 20.22.27スクリーンショット 2016-07-26 20.23.40

 

Cloudy Part:

スクリーンショット 2016-07-26 20.33.09スクリーンショット 2016-07-26 20.34.12スクリーンショット 2016-07-26 20.36.22スクリーンショット 2016-07-26 20.37.47

Historically, when VIX – as the collective expectation of future volatility – is highest, the market’s subsequent three months are better than more benign risk environments スクリーンショット 2016-07-26 20.38.38スクリーンショット 2016-07-26 20.39.10

 

Sanguine Part:

Innovators:

Health care: Innovation still matters most and nowhere is innovation more profound, more long lasting and timelier than in the health care sector
Technology: The cloud revolution continues – the two key trends are the adoption of cloud computing and the Internet of Things

スクリーンショット 2016-07-26 20.43.00

M&A:

in a slow-growth environment, firms will look to buy market share, rather than invest and build it organically
M&A revalues sectors and signals confidence
“we anticipate that technology, health care and industrials will see the most M&A activity”

スクリーンショット 2016-07-26 20.48.40

 

 

India: The Giant Awakens

A feature story from Aberdeen Asset Management

http://thinkingaloud.aberdeen-asset.co.uk/en/thinkingaloud/the-bigger-picture/india-the-giant-awakens

 

India: 1.3 billion people, will soon overtake China, once a hindrance to growth, will be its greatest asset in the future

Demographics:
1. Indians are young with over 65% of the population under 35
2.majority are highly educated and fluent in English
3. 70% of the population live in rural areas with massive potential for urbanisation
4. Indians are diligent savers and generally eschew debt
5. potential demand for a variety of goods and services from a large and expanding middle class is huge.

Dangers:
1. growth without redistribution
2. gender equality

 

History:

After the war, the socialist and protectionist model of development had failed

low growth and a series of severe balance of payments crises
Planning Commission – a key agency for economic planning for successive governments through until 2014

Inflection point in 1991, India undertook reforms (embracing market economy) out of necessity – the country was on the brink of default

 

Narendra Modi:

15th Prime Minister elected in May 2014, enacting reforms from ‘Make in India’ to improving sanitation services.

“Our trip to India reinforced our view that the seeds of significant structural changes have been sown.”

Central to Modi’s success will be his continued focus on competitive federalism – the principle that Indians are best served by allowing state governments to compete with each other (disbanded ‘one size fits all’ )

Government efficiency is improving considerably and the number of stalled projects is declining.

 

Make in India:

“some investment has taken place and more is to come, infrastructure is still poor.” Roads, power and transportation are all key target areas of ‘Make in India’.

opportunity for car growth – India has around 18 cars per 1,000 people, compared to China’s 130 and Brazil’s 250

attracted more FDI into new projects than both the US and China
FDI by GE, Alstom, Samsung-Techwin, Foxconn

 

Land reform:

The Land Acquisition Bill aims to streamline the complex process of acquiring land from rural farmers and tribes for building much-needed infrastructure

Progress can now be made on a state-by-state basis without the need to wait for central government to pass legislation

Modi’s approach is likely to further foster competitive federalism. A healthy level of competition between states for land, funds, talent and other resources is good for the country

 

Digital India:

1. transform the country into a digitally empowered knowledge economy
2. boost standards of governance of citizens through better engagement with the government

infrastructure required is vast: broadband networks, public Wi-Fi hotspots, universal phone connectivity

30% of FDI flows are tied to the rapidly expanding e-commerce sector
largest employers in India’s premium college campuses are now start-ups, many of them technology-focussed (Alibaba Group’s investment of $680m in Paytm, an Indian payments start-up)

‘Digital India’ is one of many reforms that is helping make doing business easier in India

 

Fixing corporate India:

According to the World Bank, it takes 28 days to start a business in india (19 days in Pakistan, 11 in Japan, 4 in Korea and just 3 in Australia)

One scheme in Delhi, soon to be adopted in other parts of the country, has cut the time required to incorporate a company to just one day

‘Start-Up India, Stand-Up India’ campaign bridging the gap between new start-ups and venture capital and angel investors

bankruptcy law help clear up bank balance sheets to allow lending for more productive purposes

 

Broke banks:

“The divergent fortunes of India’s banks became clear to us on our latest visit”

India’s central bank has now urged lenders to clean up all bad loans by March 2017

With the private sector unwilling or unable to participate in the current round of investment, planned government expenditure having risen significantly this fiscal year.

 

 

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“If one looks closely, changes are taking place everywhere. Indeed, reforms were always intended to be long-term in nature, rather than big bang.”

 

 

China = Internet Leader on Many Metrics

China part in the internet trends 2016 report, provided by Hillhouse Capital

http://www.kpcb.com/internet-trends

 

 

China Macro:

Robust service-driven job

~87% of GDP growth comes from China Service Industries

China Services Industries job growth is accelerating and offsetting job losses from Construction / Manufacturing / Agriculture

Income growth

Despite investment slowdown, China Urban disposable income per capita continues to grow (but at a lowering rate)

Internet users:

China Internet Users = 668MM, 49% penetration, the growth rate have been stabled at 6% level

China Mobile Internet Usage Leaders, the big 3, Tencent + Alibaba + Baidu, own 71% of mobile time spent

Daily Mobile Time Spent = ~200 minutes per user, average

Internet Business:

China Internet Traction = Advertising / Commerce / Travel / Financial Services

Trends Often Compare Favorably to USA

– China online advertising overtook TV in 2015 to be the biggest part of total ad spend, 42%  vs. 39% in USA

– China E-commerce companies dominate top retailer rankings, while in USA top retailer are not pure-play E-Commerce except amazon

– China E-Commerce Companies gaining retail share faster than USA Peers

– China Outbound Travel renetration rocketed, and is already world’s biggest outbound tourism spender

– China Smartphone-Based Payment Solutions have high engagement

WeChat payments can drive merchant loyalty & CRM: public account linked with payment enables merchants to reach existing customers for future marketing and CRM

Ant Financial (~$60B Valuation, with 450MM+ AliPay Users) is leveraging Alibaba AliPay scale and building China Financial Services one-stop-shop

China Internet Emerging Momentum: On-Demand

China On-Demand Transportation have been global leader (4B+ Annualized Trips; +4x Y/Y; ~70% Global Share)

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“China’s ok, India’s great, Asia’s cheap”

Two short stories from Aberdeen Asset Management

 

Six words (and five charts) on Asia

http://thinkingaloud.aberdeen-asset.co.uk/en/thinkingaloud/investment-clarity/six-words-and-five-charts-on-asia

 

To sum up Asia in six words:“China’s ok, India’s great, Asia’s cheap”.

don’t panic about China (yet), India’s doing well and Asian equity valuations are relatively attractive.

China:

– China’s service sector now accounts for more than 50% of GDP
– Still room for further stimulus

India:

– Fiscal deficit is lowering
– Reform progress is impressive

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Don’t feed the bears

http://thinkingaloud.aberdeen-asset.co.uk/en/thinkingaloud/investment-clarity/dont-feed-the-bears

Asian markets are getting mauled. what’s going on?

China is the main concern: loss of confidence

– stock market bubble burst

most shares traded do a poor job of reflecting corporate earnings
impotent government market manipulation
on-off speculative appetite of China’s retail investors

– shock of a yuan devaluation

Central banks across the region may be tempted to follow Beijing and weaken their own currencies in an attempt to maintain export competitiveness

Investors worried under such environment:

Prices have been supported by liquidity and confidence in policymakers’ judgement, not by corporate fundamentals.

Reasons for long

– Asia, and more so emerging markets, looks cheap compared to Europe and the US

– corporate earnings there have stabilised for the most part though money is flowing away

– “We may even see an earnings recovery as soon as next year.”

– currencies weakness may exaggerate market weakness in the short term, but they do not play a significant part in equity performance in the long run.

 

Comparisons being made with the Asian crisis nearly 20 years ago make no sense

One or two countries vulnerable to capital outflows (put pressure on debt servicing and currencies) are the exceptions and we do not see scope for contagion

– because the differences within emerging markets are better understood today

 

 

The Global Simplicity Index

http://thinkingaloud.aberdeen-asset.co.uk/en/thinkingaloud/culture-and-inspiration/the-global-simplicity-index

Focusing on the world’s 200 largest companies, a research discovery was an inverted relationship between complexity and profit

A certain degree of complexity can be good for business performance, but continually adding to it can be detrimental. The latter includes:

– trying to serve too many different market segments or customers
– attempting to do everything in-house
– having a constantly changing business strategy

Korekiyo Takahashi and Helicopter money

Learn from history: Korekiyo Takahashi and Helicopter money

Three questions left:

  1. What drives the different outcome of helicopter money in the history?
  2. Why did government bond rate remain low and there is no inflation after the unprecedented QE?
  3. Does helicopter money work today?

The reason for 2 might be the rising asset price and stalled wage level. The slump of commodity price is a best proof for the mismatched capital.

 

Helicopter Cash Clues Lie in Life and Death of Japanese Viscount

http://www.bloomberg.com/news/articles/2016-07-18/helicopter-cash-clues-lie-in-life-and-death-of-japanese-viscount

 

In the early 1930s, Viscount Korekiyo Takahashi initiated the equivalent of helicopter money, using the BOJ to directly finance deficit spending by the government.

Takahashi’s reflationary policies “brilliantly rescued Japan from the Great Depression,” Ben S. Bernanke said in 2003. A steep yen decline helped.

So what lessons should be drawn today as Kuroda seeks to stave off a deflationary downturn?

Helicopter money:

– a fusion of fiscal and monetary policy
– Rather than issuing debt, a national government draws newly printed money from the central bank, then injects that cash straight into the economy.

– Unlike debt-financed fiscal programs, a money-financed program does not increase future tax burdens

(Ricardian posits that debt-financed government spending doesn’t lift an economy because citizens know it will have to be paid for with future tax increases, depressing demand.)

However:

economists have long insisted a free lunch doesn’t exist:
its repeated usage ultimately spawns hyper-inflation. (See the U.S. Confederacy during the 1861-1865 Civil War or Zimbabwe in the last decade.)

But in some cases like Takahashi’s one, the inflation looks like controllable

Law:

The BOJ by law is prohibited from buying government bonds directly from the finance ministry. Instead, it purchases them from intermediaries such as banks.

“Unless the existing legal framework changes, helicopter money isn’t possible,” Kuroda told Japanese lawmakers on April 19.

Fact: Japan is already engaged in a strategy that involves helicopter money

Because of the negative yields on Japanese government debt, banks have little incentive to buy them unless they expect to sell them later to the central bank under its asset buying program

Whether that’s financed by issuing bonds at roughly zero interest rates or by drawing money from the central bank “doesn’t make a whole lot of difference”

We might actually see policies that economics students only ever talked about in an imaginary or long ago world (i.e. the 1930s) become real.”

 

 

ヘリコプターマネー~その内容と実現可能性は~

http://www.bank-daiwa.co.jp/column/articles/2016/2016_17.html

 

リーマン・ショック後、ベン・バーナンキは、危機を乗り切るため、フリードマン氏の主張するヘリコプターマネーに近い金融緩和策、QE (量的緩和) 策を実行し、ゼロ金利脱却に成功した。

QEは、中央銀行が新たに印刷して生み出した紙幣を使って国債を購入する方法

金利を下げ、政府は財政出動をして景気を刺激する
政府の財政出動は政府債務を増やし (金利を上げ)
民間投資を損なう恐れ
増税を恐れて消費を減らすこと

ヘリコプターマネーと通常のQEとの違い

前者は政府の財政負担にならない

中央銀行の買い切りや無期限の償還などによって、政府ははじめて無制限に国債を発行できる

現在のアベノミクスのQEでは中央銀行の日本銀行が年間80兆円の国債を買い取り、政府は日銀に利息を支払い、そう遠くない将来には国債の元本を償還しなければならない。

景気は良くなり、インフレにはなるがコントロールできないこともない

米国は第2次世界大戦時の戦費調達のために、FRBが国債の大半を買い切って資金を提供したものの、極端なインフレなどの後遺症はなかった

日本でも、1931年に発足した犬養毅内閣の高橋是清蔵相が、国債の日銀引き受けによる財政拡張政策を断行し、金本位制からの離脱や円切り下げの政策と合わせて、世界に先駆けて景気回復、デフレ脱却を実現させている

一方、

ヘリコプターマネーの実行は1920年代にドイツで起きたような「ハイパーインフレ」を招く
国債の金利を暴騰させて、通貨を暴落させる
食料とエネルギーの大半を輸入に頼る日本のような国家は、あっという間に円安が暴走して輸入物価の急騰を招き、ハイパーインフレを引き起こす

日本も、30年代後半以降は、軍部の暴走を財政面で抑えることができなくなって、そのまま太平洋戦争に突入し、45年の敗戦直後、年間500倍というハイパーインフレを経験している

暴走し始めたインフレを止める手段はそうそうあるものではない
1990年代に始まったジンバブエのハイパーインフレは、最終的には自国の通貨を捨てて米ドルを自国通貨とすることで乗り切らざるを得なかった。

 

実際問題

国債の「市中消化の原則」があったけど、マイナス金利を導入した日本銀行では、利息なしの国債を償還期限なしで発行しているのと変わりなく、実質的にヘリコプターマネー導入状態でないのかともいわれている。

1x-1

1x-11

安倍内閣では日本銀行が、日本国債の新発債の7~8割を引き受けている。アベノミクス以前は、日本銀行が保有する国債は50兆円程度だったのだが、いまや300兆円にまで膨れ上がっている。

 

It maybe only a beginning

 

Finding a Yen for Tech

http://www.bloomberg.com/gadfly/articles/2016-07-19/finding-a-yen-for-tech-deals

Japan needs more executives like Masayoshi Son, and it needs to do more deals like the $32 billion takeover.

Reason:

with plenty of cash and a currency near historic highs, Japanese companies should be forging global technology deals that could bolster the country’s own flagging industry.

Sony, for one, has $8.7 billion in cash and equivalents and a debt-to-equity ratio of 30 percent
Panasonic with $9 billion, Fujifilm at $5.3 billion and Canon with $5.2 billion all have cash and low debt-to-equity ratios, as does Nintendo, whose $5.1 billion suggests that its executives could be busy chasing deals.

Target:

Chinese playbook: approaches for all or part of the hard-drive makers, the chipmakers and chip designers

Western Digital, for example, would be a good fit for Fujifilm, Panasonic or Hitachi
Synaptics, which designs fingerprint sensors, wouldn’t be out of place at Sony, with possible synergies at the PlayStation maker’s devices unit
Panasonic, aiming for 60 percent growth in Asia-ex Japan at its lighting business, could have done well with the Philips lighting
Opera, maker of a slimmed-down browser popular in smartphones, would have been the perfect complement to Nintendo

 

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