Daily Archives: March 4, 2013 @ 10:54 am (Monday)

Kuroda Says More Purchases of Assets Needed

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The only measures that would work have been left out:

> MORE: Kuroda Says BOJ Easing Isn’t Aimed at Weakening the Yen
> *KURODA: DIFFICULT FOR BOJ TO BUY FOREIGN BONDS
> *KURODA: LAW STATES CURRENCY INTERVENTION NOT BOJ’S JOB
> *KURODA: FOREX INTERVENTION IS FINANCE MINISTRY’S RESPONSIBILITY
> *KURODA: CURRENCY RATE SHOULD BE DETERMINED BY MARKET
> *KURODA SAYS BOJ EASING ISN’T AIMED AT WEAKENING THE YEN

Full comments:

>*MORE: Kuroda to Consider Every Possible Measure to End Deflation
>*MORE: Kuroda Says More Easing Needed in Both Quality, Quantity
>*MORE: Kuroda Says Need to Consider Effects of Buying Risk Assets
>*MORE: Kuroda Says Up to Govt Whether BOJ Law Needs to Change
>*MORE: Kuroda Says BOJ Easing Isn’t Aimed at Weakening the Yen
>*MORE: Kuroda Vows ‘Even Bolder’ Steps to Approach 2% Target
>*KURODA: DIFFICULT FOR BOJ TO BUY FOREIGN BONDS
>*KURODA WILL TAKE EVERY POSSIBLE MEASURE UNTIL 2% TARGET IS MET
>*KURODA: BOJ’S JOB IS TO KEEP FINANCIAL SYSTEM, PRICES STABLE
>*KURODA WILL CONSIDER EVERY POSSIBLE MEASURE TO END DEFLATION
>*KURODA NOT CONSIDERING WHAT HE’D DO IF BOJ FAILS TO MEET TARGET
>*KURODA: STABLE CURRENCY IS GOVT’S RESPONSIBILITY
>*KURODA: LAW STATES CURRENCY INTERVENTION NOT BOJ’S JOB
>*KURODA: FOREX INTERVENTION IS FINANCE MINISTRY’S RESPONSIBILITY
>*KURODA SAYS INFLATION EXPECTATIONS CAN BOOST IMPACT OF EASING
>*KURODA SAYS MONETARY EASING TENDS TO WEAKEN OWN CURRENCY
>*KURODA SAYS MORE EASING NEEDED IN BOTH QUALITY AND QUANTITY
>*KURODA SAYS MID-TERM ECONOMIC GROWTH STRATEGY NEEDED
>*KURODA SAYS 2% TARGET IS WAY TO LIMIT INFLATION, BEAT DEFLATION
>*KURODA: NO PLAN TO FINANCE GOVERNMENT IF BECOME BOJ GOVERNOR
>*KURODA SAYS JUST EXPANDING MONETARY BASE WON’T BE EFFECTIVE
>*KURODA: BOLDER EASING COULD HAVE AVOIDED YEARS OF DEFLATION
>*KURODA WILL CONSIDER STARTING OPEN-ENDED ASSET BUYS EARLIER
>*KURODA: CURRENCY RATE SHOULD BE DETERMINED BY MARKET
>*KURODA: BOJ SHOULD BUY LONGER-TERM BONDS
>*KURODA: NO NEED TO LIMIT BOJ BOND BUYS TO 3 YEAR MATURITIES
>*KURODA: NEED BALANCED GROWTH FOR SUSTAINABLE ECONOMY
>*KURODA: SPECIFIC POLICIES TO BE DECIDED AT BOJ MEETINGS
>*KURODA: WIDE VARIETY OF ASSET PURCHASES SHOULD BE CONSIDERED
>*KURODA: MORE PURCHASES OF ASSETS NEEDED
>*KURODA: MORE EASING NEEDED TO BEAT DEFLATION
>*KURODA: EXISTING POLICIES NOT ENOUGH TO BEAT DEFLATION
>*KURODA: HAD DOUBTS OVER BOJ’S EXIT FROM EASING IN 2006
>*KURODA: END OF ZERO INTEREST RATE POLICY IN 2000 WAS A MISTAKE
>*KURODA SAYS BOJ SHOULD REGRET LACK OF COMMUNICATION WITH GOVT
>*KURODA: BOJ SHOULD NOT MONETIZE GOVT DEBT OR BUY BONDS DIRECTLY
>*KURODA SAYS HE KNOWS BERNANKE, DRAGHI AND BOE’S KING WELL
>*KURODA: WILL DO UTMOST VS DEFLATION EVEN IF BOJ LAW IS CHANGED
>*KURODA: MUST CONSIDER EASING EXIT, BUT DEFLATION IS MAIN ISSUE
>*KURODA SAYS MONETARY POLICY NOT DECIDED BY BOJ GOVERNOR ALONE
>*KURODA VOWS EVEN BOLDER MONETARY STEPS TO APPROACH 2% TARGET
>*KURODA SAYS ENDING 15 YEARS OF DEFLATION WON’T BE EASY
>*KURODA: MEETING INFLATION TARGET IN 2 YEARS IS GLOBAL STANDARD
>*KURODA: WOULD BE GOOD TO ACHIEVE 2% TARGET WITHIN TWO YEARS
>*KURODA WILL DECIDE POLICIES IN LINE WITH ECONOMIC DEVELOPMENTS
>*KURODA: NATURAL TO BUY LONGER TERM BONDS
>*KURODA: NEED TO CONSIDER EFFECTS OF BUYING RISK ASSETS
>*KURODA: VARIOUS WAYS TO ACHIEVE 2 PERCENT INFLATION
>*KURODA AIMS TO ACHIEVE 2 PERCENT INFLATION AS SOON AS POSSIBLE
>*KURODA SAYS NO COUNTRY AIMS TO ACHIEVE 2% INFLATION EVERY MONTH
>*KURODA SAYS BOJ IS RESPONSIBLE FOR STABLE PRICES
>*KURODA SAYS BOJ SHOULD NOT STEP INTO MONETIZATION
>*KURODA: UP TO GOVT WHETHER BOJ LAW NEEDS TO CHANGE
>*KURODA: UP TO GOVT WHETHER BOJ LAW NEEDS TO CHANGE
>*KURODA SAYS WAGE GROWTH NEEDED TO END DEFLATION
>*KURODA SAYS WAGE GROWTH NEEDED TO END DEFLATION
>*KURODA WILL COOPERATE CLOSELY WITH GOVERNMENT
>*KURODA SAYS WAGES AND EMPLOYMENT CRUCIAL FOR ENDING DEFLATION
>*KURODA SAYS BOJ INDEPENDENCE IS SECURED BY LAW
>*KURODA SAYS 2% INFLATION TARGET WON’T HARM BOJ INDEPENDENCE
>*KURODA SAYS BOJ INDEPENDENCE IS SECURED BY LAW
>*KURODA CONFIDENT THAT BOJ CAN MEET INFLATION TARGET
>*KURODA SAYS WON’T BE EASY TO MEET INFLATION TARGET
>*KURODA SAYS ACHIEVING INFLATION TARGET IS BOJ’S JOB
>*KURODA SAYS 2% INFLATION TARGET IS GLOBAL STANDARD
>*KURODA SAYS ACHIEVING INFLATION TARGET IS BOJ’S JOB
>*KURODA SAYS POSSIBLE TO ACHIEVE INFLATION TARGET
>*KURODA SAYS ENDING DEFLATION GOOD FOR GLOBAL ECONOMY
>*KURODA SAYS CAN’T DENY MONETARY POLICY AFFECTS CURRENCY MARKET
>*KURODA SAYS BOJ EASING ISN’T AIMED AT WEAKENING THE YEN
>*KURODA SAYS CAN’T DENY MONETARY POLICY AFFECTS CURRENCY MARKET
>*KURODA SEES POSSIBLE EFFECT ON YEN AMID BOJ EASING
>*KURODA SAYS BOJ’S PRIORITY IS CONQUERING DEFLATION
>*KURODA SAYS BOJ EASING ISN’T AIMED AT WEAKENING THE YEN
>*KURODA SAYS ABE’S ECONOMIC PLANS ARE RIGHT APPROACH
>*KURODA SAYS HE HAS WIDE INTERNATIONAL NETWORK

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Quotes from 60m interview (both interviews about Chinese real estate)

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Both interviews are worth watching:

First interview

Zhang Xin (a very large commercial property developer who’s company is worth $10bn)

“Office is the only property sector which is doing well”

“Residential property development in China has really come to and end.”

“Corruption is everywhere in China…whoever has power is in the position to be corrupt.”

“For a Chinese living in China…if you ask one thing everyone pray[s] for, its democracy…8000 miles away [from the US] people [in China] are looking for it [democracy], longing for it.”

From the second interview

60 minutes: “No nation has ever built so much, so fast.”

Question (Leslie Stahl): ‘How important is real estate to the Chinese economy? Is is central?”
Answer (western investment banker): “Yes, its the main driver of growth and has been for the last few years.”

Question (Leslie Stahl): “Who’s left holding the bag?”
Answer (western investment banker): “there are multiple classes of people who are going to be wiped out by this. People who have invested three generations worth of savings…will see their savings evaporate and then of course there are 50mm construction workers…”

Largest Residential Property developer in China (a $53bn real estate empire)

Question: “Are you the biggest home builder in the world?”
Answer (Wang): “Yes, maybe.”

Question (LS): “A typical apartment in Shanghai cost about 45x the average resident’s annual salary.”
Answer (Wang): “Even higher.”
[the US housing bubble price to income ratio peaked at about 6.6x…]

Question (LS): “Are homes in China too expensive today?”
Answer: (Wang): “Yes”

Question (LS): “What does that mean for your economy if its too expensive for the vast majority of people?”
Answer (Wang): “Dangerous…that’s the bubble…that’s the problem.

Question: “Is there a bubble?”
Answer: “Yes, of course…if it bursts its a disaster.”

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