Bond market prophesying doom for Japan economy
biz.yahoo.com
>>''We are on our way to becoming a run-of-the-mill country,'' said a trader at a regional bank, who asked that neither he nor his institution be identified. ''Japan will be downgraded.''..
..''Ultimately, I think JGBs are junk bonds,'' David Roche, the president of London-based private research house International Strategy, told Reuters Financial Television recently.
''Effectively, they are backed by the government, but the government has wasted so much of Japanese savings on absurd projects that I think people will eventually realise that the asset backing of JGBs is poor,'' Roche said.<<
There was an article in Forbes several months back that was not available in the online edition. The author called the JGB the "Time Bomb Bond." The argument was that if Japan ever raised rates, as it must eventually, all of the Japanese institutions who bought these bonds will get squashed... Large concentrations of them in portions of the financial sector, insurance industry was mentioned. |
