Japocalypse Wow – Foreigners Dump Most Japanese Stocks Since 2010

Japocalypse Wow – Foreigners Dump Most Japanese Stocks Since 2010 (ZeroHedge, Feb 6, 2014):

It would seem, in the case of momo-chasing levered fast-money flows, that Propertius was correct – “fickleness has always befriended the beautiful…” and Japanese stocks are no longer the once beautiful trend that Abe had promised them to be. A tapering of the US flow; a ripple across the bow of emerging markets; and suddenly Kyle Bass’ sarcastically-named “macro tourists” are running for exits as Shakespeare himself once wrote, “was ever feather so lightly blown to and fro as this multitude.” Historical quotations aside, the last time flow swung so violently negative, the Nikkei ended up losing 55% in the next 18 months. We love the smell of nay-sayers in the morning…

Foreigners sold the most Japanese stocks last week since 2010 and before that since the credit crisis started to implode…

Nikkei 225

This outflow was 3x the size of the entire selling following the tumble in May/June last year.

and just in case you are banking on that flowing back to the US… think again – as we are trying to explain – it’s not real money, it’s credit-created leverage…

The ironists among market punters will even attempt to construe all this as a reason to buy more developed world stocks on the premise that the money flooding out of such places as Thailand, the Ukraine, Turkey, and Argentina will be parked in the S&P and the DAX (perhaps overlooking the fact that the purchase price of these now-unwanted positions was most likely borrowed, meaning that their liquidation will also extinguish the associated credit, not re-allocate it).

A gentle reminder of days gone by when rational investors roamed the markets…

1 thought on “Japocalypse Wow – Foreigners Dump Most Japanese Stocks Since 2010

  1. It was pretty clear to me that Fukushima would change the entire game. When JP Morgan defaulted on the biggest real estate deal in history on Tokyo property less than a year after Fukushima, it was pretty clear the insiders also recognized the changed status of Japan.
    Japan is dying. Their exports are way down because nations are declining them due to high radioactivity. If their autos were not Mfg. in Mexico and the US, there would be a severe shortage of them. Soon, that will change, too, as it is becoming apparent that the radioactivity in Fukushima is just as strong on the west coast of North America thanks to the proximity. Even though the San Francisco Bay Area is 5200 miles from Fukushima, we are getting direct hits from them daily.
    Japan is finished. Other countries, especially those in direct path like the west coast, are also facing their extinction. But, US media continues to hide all this data, and unless an investor (as I used to be when the system was trustworthy) pays close attention to what is going on in all countries he/she invests in, the losses will be huge.
    That it has taken three years is amazing to me. I would have dumped any Japanese holdings back in 2011.
    If one invests, close attention is essential. I remember back in the mid 1980s, I was playing with metals and noticed Russia was dumping huge amounts of gold. My investor friends said it must be a fluke……the USSR could not be in danger of collapse………well, we know what happened.
    Investing isn’t reading the lying portfolios…..it is watching what is really going on, otherwise, you are just setting yourself up to be plundered.
    Now they are jumping ship…….but the smart ones were out of Japan years ago.

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