Japan’s Own Buyer of Last Resort… Sells

The story of the week last week was not Greenland or Davos drama, but Japan.

Japanese bonds fell to their lowest price in history. When prices fall, yields rise. Traders in New York and elsewhere globally are unwinding their “carry-trade” bets.

So, too, the Bank of Japan:

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Lower demand for Japanese bonds is pushing prices down and yields higher rapidly. (Source: Bloomberg)

The Bank of Japan’s holdings of its own government’s bonds are now near a 10-year low.

The yen carry trade has been a constant in global finance for 3 decades. Currently, the unwind is throwing the Japanese government into a crisis of historic proportions.

Americans take note. Not only are Japanese bonds undermining the AI rally on Wall Street. The crisis is a cautionary tale for the U.S. efforts to finance its own historic debt load.

~ Addison

P.S. Yesterday’s Grey Swan Live! with Joel Bowman — our “man on the scene” in Buenos Aires since before President Milei got elected – helped us rummage through collectivist politics… also a harbinger of things to come in the U.S. if New York’s Zohran Mamdani becomes the face of the Democratic Party in the midterms.

Joel also gave us a fresh primer on Investing At the End of the World as the Argentine market rapidly becomes deregulated and open for foreign investment in the country’s vast natural resources.

The replay will be up on the site for members soon.

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Later today — Friday, at 1 p.m. ET – Nick is back to help us cut your IRS tax bill in 2026.

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Our guest Nick Buhelos is going to walk us through simple steps on how you can:

Unlock 250+ deductions you currently can’t access.
Apply trading losses to other income (W2, 1099, even your spouse’s).
Shield your personal finances from trading risk.

Stay tuned for more details on how to join us on Friday at 1 p.m. ET.

If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.

How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three.

The story of the week last week was not Greenland or Davos drama, but Japan.

Japanese bonds fell to their lowest price in history. When prices fall, yields rise. Traders in New York and elsewhere globally are unwinding their “carry-trade” bets.

So, too, the Bank of Japan:

Turn Your Images On

Lower demand for Japanese bonds is pushing prices down and yields higher rapidly. (Source: Bloomberg)

The Bank of Japan’s holdings of its own government’s bonds are now near a 10-year low.

The yen carry trade has been a constant in global finance for 3 decades. Currently, the unwind is throwing the Japanese government into a crisis of historic proportions.

Americans take note. Not only are Japanese bonds undermining the AI rally on Wall Street. The crisis is a cautionary tale for the U.S. efforts to finance its own historic debt load.

~ Addison

Joel also gave us a fresh primer on Investing At the End of the World as the Argentine market rapidly becomes deregulated and open for foreign investment in the country’s vast natural resources.

The replay will be up on the site for members soon.

Turn Your Images On

Later today — Friday, at 1 p.m. ET – Nick is back to help us cut your IRS tax bill in 2026.

Turn Your Images On

Our guest Nick Buhelos is going to walk us through simple steps on how you can:

Unlock 250+ deductions you currently can’t access.
Apply trading losses to other income (W2, 1099, even your spouse’s).
Shield your personal finances from trading risk.

Stay tuned for more details on how to join us on Friday at 1 p.m. ET.

If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!