Wednesday, October 28, 2015

Today's Fun Fact: The Bank of Japan Has Accumulated an ETF Stash that Accounted for 52 Percent of the Entire Japanese ETF Market

That's from Bloomberg's "Owning Half of Japan's ETF Market Might Not Be Enough for Kuroda".
If unfamiliar with the Bank of Japan may I direct your attention to:
No, The World's Oddest Central Bank Is NOT The SNB, It's the Bank Of Japan

and to:

"Unconventional Measures: "Japan plans 'nationalisation' of factories to save industry":

Remember when, in my naïveté, I would write about, gasp, Central Banks buying equities?
Here's an example from Feb. 2008 (i.e. pre-LEH et al):

Doom and Gloom: What Can the Federal Reserve Do?

...I was reminded of a Financial Times story from March 25, 2002:
Fed Considered Emergency Measures To Save Economy
Minutes which summarized the meeting were released last week. A full transcript will not be available for five years but a senior Fed official who attended the meeting said the reference to "unconventional means" was "commonly understood by academics."  
The official, who asked not to be named, would not elaborate but mentioned "buying US equities" as an example of such possible measures, and later said the Fed "could theoretically buy anything to pump money into the system" including "state and local debt, real estate and gold mines – any asset"....
...The question arises "Can the fed intervene in the Equities Markets?"
Again, two answers. 1) It's definitely something Central Bankers have thought about. 2) The Fed may need some enabling legislation which they would probably get if they requested it.
The FT reported February 21, 2002 "Japan Suspected of Stock Market Intervention".
A Google search finds 700 references to the "Stock Buying Body". 
Here's a pungent one:
"We must halt this fall in shares. It's like diarrhea, we must stop it. The stock-buying body was set up precisely to absorb such selling (offloading of cross-shareholdings by banks). If February is such a month, there is no excuse for not functioning at that crucial time" 
Finance Minister Masajuro Shiokaw – Feb 7
More relevant to the American markets are a couple Fed papers, the first of which is astounding for its frankness...MORE