​Bank of Japan (BOJ) Pounding Nails in Bull Market’s Coffin

Michael Markowski  |

Bloomberg’s reporting last night that the BOJ (Bank of Japan) had accumulated the equivalent amount of shares to be among the top 10 shareholders for 90% of the Nikkei 225 could very well be “the final nail in the coffin” of the global bull market, which was born on March 9, 2009. (Please see Bloomberg, April 25, 2016 article entitled, “The Tokyo Whale is Quietly Buying Up Huge Stakes in Japan, Inc.”.) The article disclosed that the BOJ had also accumulated 10% of the outstanding shares of all Exchange Traded Funds (ETFs) in Japan. Finally, Bloomberg Television reported that BOJ ownership of Japanese equities was equivalent to 1.6% of Japan’s entire stock market.

With the BOJ’s taking significant equity stakes in Japanese companies it has more invested in the Japanese stock market than BlackRock, Inc., the world’s largest money manager, and Vanguard Group, which oversees more than $3 trillion. The BOJ’s actions undermine and challenge the integrity of the world’s stock markets. Further, the activity acknowledges that BOJ and the world’s central banks are desperate, and willing to do anything and everything that they can to prop up the markets.

The disclosure of the BOJ’s equity stakes has thrown cold water onto the reversal of sentiment and momentum for the U.S. dollar and other major currencies versus the yen that occurred on Friday April 22, 2016. My Saturday April 23, 2016 article entitled, “Why Market Could Spike to All-Time Highs Before it Crashes” specifically concerned the exceptional reversal of sentiment that occurred when all of the world’s major currencies appreciated significantly against the yen on Friday April 22, 2016.

Obviously, what I predicted only two days ago has become irrelevant. The U.S. dollar on April 22, had its biggest one day advance versus the yen since October of 2014 advancing by more than 2%. The cause of the change in sentiment was the result of Bloomberg’s reporting that the BOJ was considering instituting a negative rate loan policy. (Please see Bloomberg’s April 22, 2016 article entitled, “BOJ May Consider Negative Rates on Loans”.)

Recent disclosures about the BOJ support statements made in my March 16, 2016, Equiites.com article entitled, “Ridding the World of Negative Rates May Require Meltdown of Income-Producing Assets”. The article provides the math and rationale for the S&P 500’s potential decline by more than 50% to 925 from its current 2080 by early 2018. The article included my prediction that the decline would be gradual and that it would be caused by “... statements that will be made by central bankers” of leading central banks including the BOJ, ECB (European Central Bank) and the U.S. Federal Reserve bank.

In my video interview “Why Negative Rates could send the S&P 500 to 925” below, I explain my rational for the S&P 500 going to 925. In the second video “Markowski Visionary Analyst 5 of 5” below, I explain the Black Swan asset protection strategy that I am recommending. It is the only liquid assets protection insurance.

The research philosophy of the Dynasty Wealth LLC, the “boutique” research firm that I founded perfectly positions an investor with the high-risk and high-return investment opportunities required to effectuate a “Black Swan” investing strategy. Dynasty Wealth evolved from research that I had conducted on the ongoing transformation from the industrial economy to the digital economy. My research findings enabled me to conclude that the period from 2015 through 2020 would be the best ever for investors to generate dynasty wealth returns of 10- to 100-times from utilizing a truly diversified portfolio. The video entitled, “Digital disruptor companies have the potential to get $10 billion valuations quickly,” below provides details about how investing into a portfolio of digital disruptors enable investors to create dynasty wealth. It discusses digital disruptor UBER. A $10,000 investment into UBER in 2010 was valued for $105 million in 2015.

My April 1, 2016 Equities.com article entitled, “No April Fool’s Joke: NIRP Crash Indicator Elevated to Pre-Crash Warning” provides access to all of my March 2016 research reports. Below are the three other video interviews of me explaining negative interest rates:

Additional videos are available explaining digital disruptor and first mover companies, whereby selectively investing in these market niches enables an investor to create dynasty wealth relatively quickly. (Please see http://www.dynastywealth.com/video.php.) In-depth information regarding my past and current predictions is available at www.michaelmarkowski.net.

My predictions are frequently ahead of the curve. The September 2007 predictions that appeared in my EquitiesMagazine.com column stated that share-price collapses of the five major brokers, including Lehman and Bear Stearns, were imminent. While accurate, they proved to be premature. For this reason I had to advise readers to get out a second time in my January 2008 column entitled “Brokerages and the Sub-Prime Crash”. My third and final warning to get out, and stay out, occurred in October of 2008 after Lehman had filed for bankruptcy. For my article entitled,“The Carnage for Financials Isn’t Over” I reiterated that share prices for the two remaining public companies continued to be too high. By the end of November 2008 share prices of both Goldman and Morgan Stanley had fallen by an additional 60% and 70%, respectively — new
all-time lows.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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