Home » Technology


Updated on

JGBs 3x Short ETN: HOW TO GET <del>RICH</del> POOR QUICKLY!!!My friend sent this to me and I got a kick out of it. He wants to remain anonymous, for the time being. It is obviously a satire and not from Powershares.

Thought you guys might get a kick out of this. I just saw Powershares released inverse JGB ETN’s so instead of venturing out on Black Friday I wrote this… It’s what I image the pitch for PowerShares new inverse JGB product was.



Are you a retail investor tired of watching professional bond traders and hedgefund managers losing their shirts in the “can’t miss” trade of the last two decades. Wish you could join in and experience the same pain they did. With PowerShares DB Inverse Japanese Gov’t Bond ETN’s now you can.


That’s right retail investors, with our new Inverse JGB ETN you can join the hedgie crowd in losing money. But that’s not all! Want to lose big time? Perhaps big enough to put your retirement in danger. No problem, have we got the solution for you! It’s the Inverse JGB ETN with 3x leverage. That’s right, you can lose your capital three times faster. You’ll be able to recreate the experience of big time traders and fund managers in your own brokerage account as you feel the dread of telling your boss (spouse) about your losing trade and experience those sleepless nights as you watch your AUM dwindle at 3x the speed of our regular short JGB product!


But wait there’s more! We also include a complementary PowerPoint presentation on why shorting the JGB is such a great idea. Just like the big investors you’ll be able to take this presentation all over town to show how smart you are. The presentation includes highlights of all the key points that have lost countless of investors, portfolio managers, and traders money over the last two decades. We include slides for all the favorites! Japan’s high debt to GDP ratio (the highest in the developed world!), Japan’s rock bottom interest rates (surely they have to go up!), Japan’s poor demographics (always a crowd favorite!), Japan’s high domestic savings rate (those dirty foreigners will “demand” higher interest rates soon. right? right… ?), the latest threat of a ratings agency downgrade (trust us, this will be the downgrade that finally does it. P.S. S&P is the latest one threatening.), and just in time for the holidays we’ve added a new slide with Reinhardt and Rogoff’s terribly flawed study on debt to GDP (see, even the academics are sure this is a can’t miss trade).


If you have no knowledge of how the Japanese monetary system works and enjoy losing money than this is the product for you!


Investors in any of these products will need to ignore the following factual information

(1)    The Japanese government issues liabilities in a currency it can create an unlimited amount of

(2)    The Japanese Central Bank sets interest rates

(3)    Japan has been fighting deflation, not inflation for the past two decades

(4)    Deficit spending is not de facto inflationary

(5)    Issuance of JGBs is a bank reserve and interest rate maintenance operation not a funding operation

(6)    Japan’s national debt is an accounting identity equal to the net private and foreign sector savings. A decrease in savings desire will lead to a corresponding decrease in the deficit/debt.



The PowerShares Team

Leave a Comment