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Old 10-07-2018, 11:49 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,534
more milestones on the road to bond default

You may be tempted to think that the economy is OK for most. You may believe that the crash is in a holding pattern. Not so. We are passing milestones on a regular basis on our journey to insolvency. Sovereign Bonds have broken out of a trendline that began in 1981.
Now, junk bonds (ccc) have broken out of a trendline.
10/07 Junk bonds’ incredible shrinking premiums make CCCs pricey – Gulf Times
10/07 Europe’s junk bond bubble has finally burst – Zero Hedge

China must inflate to keep employment going.
10/07 China pumps $109bn into economy as trade war bites on growth – Guardian
They're crashing anyway. OZ depends a lot on China.
10/07 Australia auto crash on top of housing crash – Mish
10/07 Why the Aussie dollar is crashing –

The Central Bank is supposed to take the punch bowl away when the party gets going real good. BUT, voters and investors do not want the party to end. Yellen pumped it up good to help obummer. Powell is emptying the punchbowl.
"Federal Reserve Chairman Jerome Powell said the central bank has a ways to go yet before it gets interest rates to where they are neither restrictive nor accommodative."
"The bottom line is the Fed waited much too long to begin normalizing monetary policy. Moreover, they pre-committed to an extremely gradual path of rates increases. This policy approach essentially ensured that so-called "tightening" measures would fail to tighten financial conditions. Over-liquefied and speculative markets were content to look right through them, confident that cheap liquidity and easy Credit conditions would run unabated."

"each time rates have climbed towards 3%, the market has stumbled.”
"Our bigger concern remains interest rates simply for one reason – you can NOT have higher stock prices AND higher interest rates. Period.
One or the other will have to give."
"With bond traders more short than at any point in history, the ultimate “reversion to the mean” in Treasury’s will drive rates towards zero."

Charles Huge Smith has a good article, The Dynamics of Decadence
oftwominds-Charles Hugh Smith: The Dynamics of Decadence
Italy is still stirring things up.
10/07 Italy outlook darkens as politics skews from orthodox thinking – Bloomberg
10/07 Italy’s debt crisis flares up as showdown with the EU intensifies – Wolf Street

10/07 The “VaR shock” is back: global bonds lose $880 billion in one week – ZH
That won't do anything for confidence.
10/07 The US spent a record $523 billion on debt interest in fiscal 2018 – Zero Hedge
WE forked over $ 1/2 trillion to the owners of the FED. More deflation.
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