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Japanese yen collapse?

Summary:
There's 2 things working against the yen, and neither of them have anything to do with monetary policy.

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There's 2 things working against the yen, and neither of them have anything to do with monetary policy.
Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

28 comments

  1. You buy NFLX before the close?

  2. Someone has to get weaker if the US dollar is getting stronger…but all of fiat is getting weaker against real things

  3. NFLX sux…some people have more money than sense

  4. Thanks Mike

  5. Japan on purpose devaluing the Yen. Japan can no longer compete in the electronics sector due to High quality of Chinese brand electronics being competitive enough. Japan has no choice but to compete in price now.

  6. The US doesnt have enough man power to build the homes. It needs immigrants from Latin America and poorer slavic European nations to do these hard physical manual labor and there's not enough of them, not to mention workers to help repair and maintain already built homes. This is the same contributing underlying reason why the USA cannot industrialize and modernize its infrastructure because it knows it will siphon manual labor workers from the private sector. USA govt can print all the money in the world to fix its infrastructure but it just doesnt have enough laborers. Multigeneraitonal Americans dont want to do this work.

    • Multigenerational Americans have been taught to not pursue "manual labor". I remember my high school guidance counselor asking me if I wanted to be a mason my entire life in a demeaning tone. Lots of high schools have dropped trade classes to get young men and women's foot in the door to learn good life long skills.

    • This is an interesting point. Do you have any hard data backing up these claims? I would be interested to research more.

    • I agree and the only way too fix this is to change the incentive structure. There are simply too many rentiers. Working an honest job especially a low paying blue collar one is for the birds when everyone can see the speculator who's produced nothing driving in a lambo.

    • This is by design. It keeps the cost of labor down to keep importing it from poor places. You only have 3 choices in the U.S.: Be born upper middle class or wealthy and make sure you don't leave that ecosystem bubble, work 60+ hours a week to avoid homelessness, or be left to rot in the gutter if you're not lucky enough to find some scraps somewhere if your income is in the bottom half. This entire economy is darwinist. Only the strong are allowed to live well, as the rich keep taking more and more % of the wealth. Either be an exceptional laborer for their projects, or be left to rot.

  7. Mike, do you play / would you play the short end of the oil market or take advantage of the contango and go 6/12 months out?
    (And liquidate once COTs flip)
    Ta🙏

  8. Its almost impossible for young people to save a down payment o a house when homes are going for over 300K. They will be permanent renters for life.

    • @Max0r847 I know they don't car, I am just saying this is the new reality of our Country. A young persons best bet is to buy a nice RV and live in that as cheap as they can and save like hell for retirement.

    • ​@John D Sad isn't it? Scrimping, saving, living under severe austerity one's entire life… just to avoid dying a miserable death later on.

  9. Housing is complex, just looking at housing starts isn't enough. You need to look at demographic household fromation trends, utilsation rates/2nd home demand , how much construction is replacement as oppsoed to additional, household size averages etc
    What happened is the US was moving into a demographic hot spot of prime age workers 2020-24 then covid hit and knocked out any potential new supply tempering that along with low interest/morgage rates, creating a low inventory led price boom. As rates rise that will temper house prices, but unfortunately also limit new construction.
    Worse than an undersupply is a speculative oversupply crditn driven price boom such as occured during the run up to the GFC, my expectation is this will occur again as private debt and prices build momentum culminating in another housing bust around 2026/7 but hopefully I am wrong or at least it will not be on the same scale as 2008.
    By 2026 I expect US house prices will be at least around 50% higher in nominal terms.

    • Another big factor in big cities is foreign investment crowding out local buyers. Here in my midling midwest city house price increases have been comparatively modest.

    • @Zybernetics Yep it's a factor, but they are a smaller % of the residential market than some people believe, much bigger factor in commerical real estate. I don't like calling it investment though, if they don't actually build or improve then it's just idle and parastic speculation.
      The typical 18 year cycle dynamics (which have been highly predictive thus far in this particular cycle, as well as suggesting the 2008 crash) are the big cities and major hubs inflate first, then high prices there push buyers and speculation further afield.
      The US has the advantage of a fair amount of economic diversity and cheaper land as a safety valve, but you don't need a housing bubble everywhere across the US for it be a problem when it hits banks and the financial sector.

  10. Japan should see growth from the fiscal deficit, right?

  11. The 30 year mortgage is 5% and might hit 7% by the end of the year. I think the housing price will go down or flat for a while.
    For the stock market, we might hit another new low before the end of the year.

    • Lots of indicators suggesting a global slowdown, that will depress yields at the long end and keep house prices strong though not at the double digit levels of the last year or two.
      The US has strong demographics, I expect at least 50% price increase from here to around 2026/7 peak.

  12. How is the deficit a negative? Deficit means nothing if they have the resources to use that money – you know that mike..

  13. LOL…. the "housing market" in many places is wealthy people buying up all the overpriced debt traps (homes) so they can rent them to the vast swaths of permanent renter slaves created by this dystopic economy.

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