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Old 06-23-2018, 10:06 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,490
Yield curve,,,, slowly melting

Well, there is a lot going on. Emerging market debt is on a slow boil as interest rates rise. Their debt just becomes too expensive to service. At the same time, domestic U.S. debt is on a fast boil. 2/10 of a percent rise in interest rates claws out an additional $1 trillion in interest charges from the economy.
" the ECB has been printing money and buying Eurozone debt roughly 33% faster than the economy of the Eurozone has been growing."
Eurozone debt is the deep-fat fryer, not the hot-pot.
"Ten-year Treasury yields fell three bps to 2.90% (up 49bps). Long bond yields slipped a basis point to 3.04% (up 30bps)"
This is the feared inverted yield curve. You can see that it isn't yet inverted,,, just close. When Russia recently dumped a whole slew of bonds, it drove up the 10 year. That pushed things closer to inverted. You can also see why GOV has to lie about price inflation. At the true 10% price inflation, the long-bond is a big loser.

"With such complexity in the world, central bankers should be disinclined from grand experiments. A decade of central bank rate manipulation, "money" printing and market intervention has ensured deep structural changes in the marketplace."
They didn't fix anything because they don't have a clue of how the system works. All they cared about was saving the banks,,,, at any cost. Well, the cost is here and, they are not going to like it.

"Thursday from Zero Hedge: "This Is The Greatest Short-Squeeze In History." The Goldman Sachs Most Short (50 highest short interest names above $1bn) is up 18.8% y-t-d. From May 3rd intraday lows, the GS Most Short has surged 20%"
These are people betting on a crash.

You Brits are going to get blown out of the water,,,, at the same time that you blow up the EU. Good thing that you have your own currency. The Irish are getting revenge for the potato famine.
Here is a graph of the DOW.
Here is a good graph on the breakout of interest rates.
"The US government has borrowed and increased official debt an average of 8.8% per year since 1913. "

6/23 Europe hits back at Trumps tariffs as trade tensions mount – Bloomberg
6/23 China moves to quell systemic bond risks after wave of defaults – Bloomberg

The tariffs are going to do a lot of damage.
6/23 Water wars: India facing “worst crisis in its history” – Zero Hedge
Pakistan: Pakistan may soon have world's third largest nuke stockpile ... › News › Defence

In Kashmir, Pakistan and India race to tap the Himalayas |
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