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45 Rockefeller Plaza 69 th Floor , New York, NY 10111, United States

Call 646.953.3332

73 Market St, Venice, CA 90291

Call 310.307.2538

Design Offices Berlin Humboldthafen

Alexanderufer 3-7, 10117 Berlin, Germany

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How long until the collapse of the Japanese government bond market causes one of these institutions to fail and send a shock-wave around the world like Silicon Valley Bank in 2023? It’s coming…

Two weeks before the Black Monday crash in September 1987, a Japanese chemical company called Tateho Chemical Industries announced that it had lost $141 million, more than its entire market value, by speculating in Japanese government bonds. The announcement sent a wave of anxiety through the markets…

Speculation by Japanese companies in stocks and bonds had become so rampant in that era, the Japanese invented a word for it – zaitech – which literally means ‘financial engineering.’

They thought it would pop Japan’s stock market bubble, but the banks bailed Tateho out and the Japanese stock market kept rising for another two years. Amazingly, Tateho is still in business today.

38 years later, Japanese government bonds have been cratering in price. This chart shows the price of the 40-year government bond. It’s down about 25% since August and made a new low today. It now yields 3.14%.

I’m wondering, who will be the next Tateho and admit to taking massive losses from their holdings of Japanese government bonds?...