Bonds are in a quite mini-crash nobody really talks about which is devastating for the FED and the stockmarkets. Since we will have a net 2 tril new issuance next year compared to 200 bil in 2009. Its basically a vote of failure of the FED and the Obama admin as they will have big trouble selling bonds next year and whatever they do will bring stocks down. They could bring stocks down deliberately to create artificial demand by save heaven buying ( likely scenario) or trigger a bond crash on a faster lane which would trigger stocks to go down anyway as it would kill the so called recovery story right away. Besides a further steepening curve creates losses for banks who have locked in their carry spread already. Either way truth is a force you can surpress temporarily but it finds its way to the surface. This bullshit story the worst is over is not confirmed by the markets the stock market is just in a camouflage trade up as all the underlying stats are made up and inflated but not representing the truth of the situation. Bonds do confirm though that very shortly in a matter of days stocks will turn north as the bond should have a short term bottom 2-3 trading days lower.
Tuesday, December 29, 2009
Bond chart harbinger of bad things to come for stocks
Bonds are in a quite mini-crash nobody really talks about which is devastating for the FED and the stockmarkets. Since we will have a net 2 tril new issuance next year compared to 200 bil in 2009. Its basically a vote of failure of the FED and the Obama admin as they will have big trouble selling bonds next year and whatever they do will bring stocks down. They could bring stocks down deliberately to create artificial demand by save heaven buying ( likely scenario) or trigger a bond crash on a faster lane which would trigger stocks to go down anyway as it would kill the so called recovery story right away. Besides a further steepening curve creates losses for banks who have locked in their carry spread already. Either way truth is a force you can surpress temporarily but it finds its way to the surface. This bullshit story the worst is over is not confirmed by the markets the stock market is just in a camouflage trade up as all the underlying stats are made up and inflated but not representing the truth of the situation. Bonds do confirm though that very shortly in a matter of days stocks will turn north as the bond should have a short term bottom 2-3 trading days lower.
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