THOUGHTS

Back on the Conspiracy Theory.

Sentiment surveys and Economic activity is out of whack. On one side where you see surveys and numbers that show the current economy is not all that bad, the sentiment is on the down side. What do we make of this? I say its all in the human mind. Lets go back to the human pyshcology with the Kubler Ross stages of

1. Denial, 2. Anger, 3. Bargaining, 4. Depression, 5. Acceptance

I guess the mass psych is currently in some sort of denial stage and bargaining stage, then we accept and recover. If not, what the hell, world war III.

And at the end of the day, I guess the Central Banks are playing their cards right.

Yen Market

Markets opened with Nikkei dropping another 1% and JGB future @ 142.88, approx. +20sens. Nothing hit on cash JGBs. Then more buying of the 10Y @ -2.5bp 0.92% but you can feel some lackluster comparing to the feeding frenzy from last week.

Some softening into mid-morn which hints some profit taking with 10Y @ -1.5bp. Then as anticipated, some buying into the 20Y @ -2.5 Approaching the break, we start seeing more profit taking with 10Y JB309 @ -0.5 0.94% followed by more buying of 20Y and 30Y.

Morning Session Summary [selling 10Y, buying more of 20Y and 30Y, 5Y unchanged]

Afternoon session, we see more of 10Y @ -2.0bp and 20Y buying. 20Y JL119 was bought to -4.5 @ 1.545% with JGB fut @ 142.77 30min before close, we start seeing 10Y JB309s cheapen to previous day close and JGB Fut @ 142.66. Nikkei also recovered the morning drop.

Afternoon Session Summary [selling 10Y, buying 20Y and more of 30Y, 5Y unchanged]

THOUGHTS

The californian laaaid back mentality is getting to me, especially after accidentally watching hills on MTV. Just makes you want to say, hell, its summer and lets just chill until the government decides what they want to do or rather for the market to make up its mind. pls concesss * if thats even gramatically correct...

Summer Fatigue (natsubate) until summer season but what next?

Lets rethink the world's economic situation again? What has changed between the booming good days and the current bad? Except for complete deleveraging of the market, NOTHING?

We still have a growing chinese economy if not slowdowned to a healthy pace and not to mention an emerging new asia front. The US may be paced back a few notches and the EU next to bankruptcy but so what, we saw that back in the old days and that didnt destroy the

economy not to say we are currently pricing the market at worse-than double dip scenario. I say that we are probably in better shape then the previous steroid pumped economy and the only liposuction left to do would be the heavy government pension debt weighting upon the economy. So, I say, wake up guys, be prepared for the recovery after the summer season or retire!

Yen Market

*The common theme this week seems to be the Yen appreciation but considering current levels @ 86.12, we need not worry about it just yet.

MARKET

Japanese Quarterly GDP came out right before open weaker than expected which resulted with BB screens open with strong interest but as expected, nothing hit. Radio silence..

JGB future surged to 142.60. Then 7y sector JGB then got hit in small volumes @ -2.0 which followed with 10Y JB309 trading at -2.5. Market was bought throughout the morning session until -3.0 levels which shows again the current strength in JGBs and prevailing summer festival.

Afternoon session was stuck as per morning session and Nikkei gained half of the drop on open @ 9186. Late in the session, we then see buying in the super long 20Y @ -2.0.

Approaching close, 10Y is bought to -3.5bp @ 0.945% and closed. JGB Future closed at 142.68.

*Conspiracy Theory No.1 - The Central Banks*

*Conspiracy Theory No.1 - The Central Banks*

The Fed, ECB, and the BOJ has unanimously agreed to counter　the slowing economy inspite of announcing recovering markets awhile ago...so what the hell is going on? Corporate profits are back, Bank revenues in the black and in better shape with the bad loans written off. I smell a conspiracy to fend of inflation on the recovery as the data is showing hope and history teaches us that the market has much in common with deep scuba diving, if you swim

up too quickly after a deep dive, you blow up. So for those, who "know", be prepared!

最近24見過ぎて、政府がグルに見えてきたのはなんででしょう。。

つぃこの前に景気が回復していると連呼していた中銀勢がまたダブルディップを思わせるような発表をしている事はおかしいと思わないかいっ!これきっとインフレ防止の陰謀と確信しているジャックがいる。実態経済を見ると決して状況はさほど悪くないのに、今の債券相場はダブルディップ以上の完全停滞的なプライシングをしている。しかし、景気の実態が完全消滅ではなく、むしろ成長基調にあると気づいたら、その爆発的な反発インフレを防止するため、中銀たちが手を合わせて景気の紐を緩やかに伸ばしているではないかと。。。ジャックが思っている。