Are the Japanese really calling in loans to the US

[davidinalameda]

just saw that one someone's FB page

just wondering how much of it is true

[The Velveteen Ocelot]

1. If it was on a Facebook page it must be true!

[sharp_stick]

2. It must be true

if it was on facebook.

:crazy: :freak:

[Statistical]

3. US treasury bonds are not callable.

You get your money when the Treasury pays you. There is no negotiating. On a 30 year bond you get 60 interest only payments then your principal back at the end of 30 years. Don't like it, don't buy it.

The Japanese can "call in" the debt just about as much as your bank can force you to pay youf mortgage in full in the next 30 minutes (cash only please).

[flamingdem]

5. It's the debt I've read about nt

[Junkdrawer]

6. The real qestion is: Will they buy more?

Can they buy more?

[Statistical]

8. Exactly that is the issue.

Because man we are more addicted to debt spending than just about anything else in this country. We love spending other people's money.

[Cali_Democrat]

13. The Japanese can always sell their US Treasuries in the open market

I think that's what they meant.

[taught_me_patience]

14. Even if they were callable

Callable means that the issuer can call them back... not the other way around.

[Fool Count]

15. That is just a matter of semantics. Japan owns so much of US Treasuries

of different maturities that it must constantly roll over the expiring ones into new US debt.
If it stops doing that, one can say that it is in effect "calling in" the debt. It can even
attempt doing it all-at-once by selling the treasuries on the open market, which will also
effectively suppress their prices (even the new issues) very significantly. That, of course,
means that US will pay higher interest on its new debt. Not good, given that the only reason
US Government remained solvent for so long is the persistently low interest on US Treasuries.

[JCMach1]

4. Selling treasuries??? dunno how is the bond market doing?

[Zephie]

7. Rightwing rumors, attempting to justify denying aid.

[Make7]

9. Shouldn't we wait for some anonymous tweet for confirmation? ( n/t )

[ZombieHorde]

10. Corrects March 15 story to remove Sumitomo Corp's $1 billion loan, which was signed on March 10

http://www.reuters.com/article/2011/03/16/japan-loans-factbox-idUSLDE72F0VT20110316

LONDON, March 15 (Reuters) - Syndicated loans of $6.5
billion face delays as Japan's financial markets continue to
experience disruption after last week's earthquake.

The slowdown is affecting $4.5 billion of syndicated loans
that were already in the market and at least $2.05 billion of
deals that were coming to the market according to Thomson
Reuters LPC data.

The figure is however far higher if bilateral loans are
included or loans that were in earlier stages of preparation.
Bilateral loans -- from banks direct to companies -- are a
significant feature of Japan's self-sufficient loan market and
are not widely syndicated.

~snip~


ISSUER AMOUNT PURPOSE
-------------------------------------------------------------
eAccess...................................165 bln yen.....Debt repayment
Electric Power Devel Co...........17 bln yen........Proj fin
Culture Convenience Club Co...100 bln yen.....Management buyout
Works Applications Co. Ltd.....17 bln yen........Management buyout
Mitsubishi Corp.........................$1 bln yen.....Gen Corp Purposes
Skylark Co. Ltd........................150 bln yen.....Leveraged buyout

[notadmblnd]

11. just a rumor as far as I can tell

the question has been asked on message boards, just like you are doing now. However, there are no credible news sources reporting anything about it that I can see.

[davidinalameda]

16. thank you

[Cali_Democrat]

12. Notice the Japanese Yen making 16 year highs against the dollar

The Japanese could be selling US debt so they can finance reconstruction and rebuilding. After they sell the debt, they have to convert their dollars to Yen. This is what leads to the rise in the Yen.

Normally when a country dumps US debt, you would expect bond prices to fall and yields to rise. It's interesting to note that US treasuries have actually been rising. This is because of the recent volatility in the stock market. US Treasuries are considered a safe haven.

The Yen is also considered a safe have when there is market volatility, so that's a factor.