Tag Archives: Bond market

  • Blog
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    Defying Gravity

    The case for hedging against a market downturn
    by Adam Taggart

    Wednesday, September 10, 2014, 4:05 AM

    7

    Today's markets exist in an Oz-like, fantasy world. For 5 years now, stock and bond prices have risen like Dorothy's balloon, without so much as a puff of downdraft to spoil the fun.

    Everybody likes higher prices, so let's have them always go up! Forever!

    Whether that can happen is a topic of current hot debate, though few think corrections have been permanently banished from the financial markets.

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  • Blog
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    I Blame The Central Banks

    For the coming bond bubble disaster
    by Chris Martenson

    Thursday, August 28, 2014, 12:17 AM

    43

    The current bubble in financial assets — in both equities and bonds of all grades and quality — raging in every major market across the globe is no accident.

    It's a deliberate creation. An intentional result of policy.

    Therefore, when it bursts, we shouldn't regard the resulting damage as some freak act of nature or other such outcome outside of our control. To reiterate, the carnage will be the very predictable result of our terribly shortsighted decision-making and defective logic.

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  • Podcast

    New Harbor: Now is the Time for Discipline in Protecting Wealth

    Lower stock & bond prices ahead
    by Adam Taggart

    Saturday, August 24, 2013, 7:09 PM

    40

    The stock market has been on an upward streak for the past two years, with the Dow and S&P near their all-time highs. Recently, though, they've shown signs of toppiness. And certainly, the macroeconomic risks loom larger than ever. Where are equity prices most likely to go from here?

    Interest rates on bonds have nearly doubled off of their historic lows from a year ago. That puts downward pressure on bond market prices, as well as a tremendous number of other important asset classes, like housing. Where are interest rates most likely to move next?

    For these (and other) reasons, the current environment is extremely challenging for investors.

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  • Podcast

    Bill Fleckenstein: Hold Tight To Your Gold

    Why it's going to go "one hell of a lot" higher
    by Adam Taggart

    Sunday, April 21, 2013, 4:35 PM

    6

     

    The bond market is an accident waiting to happen.
     

    When the bond market finally does crack, it is going to be one epic nightmare that is going to make 2008 and 2009 seem like a picnic. It will be a different kind of a crisis; but it will be an enormous crisis. These people that are bullish about stocks and bonds and the bond market, they do not understand anything.

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  • Blog
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    Japan vs. Newton (and Certain to Lose)

    Running head first into hard limits
    by Chris Martenson

    Tuesday, April 9, 2013, 1:17 AM

    32

    Conventional thinking and reporting has it that Japan is conducting a larger version of the same monetary experiment they’ve been running for about 15 years.  The implication here is that we can safely analyze what Japan is up to through the same monetary lens as always, but with a slightly wider aperture.

    By now, we are all familiar with the details.  Japan has initiated a program of monetary expansion that goes by the shorthand of 2-2-2.  In 2 years, the Bank of Japan (BoJ) will fully double the monetary base as they seek a minimum of 2% inflation.

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  • Insider
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    How to Survive the Mother of All Bubble Burstings: A Collapse of the Bond Market

    It's time to batten down the hatches
    by Chris Martenson

    Thursday, March 21, 2013, 8:43 PM

    50

    Executive Summary

    • The three main signs presaging a bond-bubble collapse are now evident
    • Why the Fed will fail to get new credit debt growth at the rate it needs
    • The return of CDOs and other risky tactics that show market participants have returned to reckless thinking
    • How a bond market collapse will play out
    • How to product yourself and your wealth during the extreme pain of a bond market collapse

    If you have not yet read Part I: Investors Beware: Market Risks Today Are Higher Than Ever, available free to all readers, please click here to read it first.

    The dangers growing in the bond market are, of course, all the result of the Fed, et al., cramming the real rate of interest on Treasury bonds into negative territory, starving investors for income, and forcing them to chase yield whenever and wherever it can be found.  Given a long enough time without a serious disruption in the markets, you eventually find yourself exactly where we are, with everyone chasing yield because they have to. Hey, everybody else is, and nothing bad has happened yet, right?

    Of course, the odds of this ending well are practically zero.

    How ridiculous has it become?  How about a company currently in bankruptcy proceedings able to sell bonds at investment-grade yields?

    AMR Bankruptcy Yields Record-Low Bond Coupon

    Mar 13, 2013

    American Airlines is selling investment-grade debt even as it spends a 15th month in bankruptcy while bond buyers look ahead to the merger with US Airways Group Inc. (LCC) that will create the world’s largest carrier.

    The AMR Corp. (AAMRQ) unit issued $663 million of so-called enhanced equipment trust certificates yesterday that included a portion paying 4 percent, matching the record low coupon for similar airline debt, which was first awarded to United Continental Holdings Inc. in September, according to data compiled by Bloomberg. American is also seeking to refinance about $1.3 billion of bonds backed by aircraft after receiving court approval to do so in January.

    By the time you have 'investors' offering money to a perpetual basket-case like AMR a company that also happens to be in bankruptcy proceedings at present at investment-grade 4% yields, you know you are in the midst of a crazy bubble. Consider this anecdote to be the bond market equivalent of a hairdresser from Las Vegas buying her 19th house…

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  • Blog
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    Investors Beware: Market Risks Today Are Higher than Ever

    It's time to start worrying about the bond market
    by Chris Martenson

    Thursday, March 21, 2013, 8:42 PM

    10

    After the shot across the bow in 2008, you might have expected regulators and market participants would use the experience to change for the better, to become more prudent, and to reduce the sorts of risky behaviors that almost crashed the entire system.

    Unfortunately, you'd be wrong.

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  • Blog

    Daily Digest 12/12 – China Rates Worries on Gold, Senate Bill Extends IRA Donations, OPEC Dismisses $90 Oil as ‘Blip’

    by DailyDigest

    Sunday, December 12, 2010, 4:00 PM

    0
    • China Rates Worries Weigh On Gold
    • Failed Us Bank Count In 2010 Nears 150-Mark
    • Euro Will Not Fail, Say Wolfgang Schaeuble and John Major
    • Senate Bill Extends IRA Donations, Other Provisions
    • Bond Market Signals No End to Deflation for Eight More Years: Japan Credit
    • A Secretive Banking Elite Rules Trading in Derivatives
    • Swan Takes on Australia’s Four Big Banks With Plan for Greater Competition
    • OPEC Dismisses $90 Oil Price as ‘Blip,’ Maintains Production Targets Again

    Crash Course DVDTake home the Crash Course DVD for an insightful look at the next twenty years. (NTSC or PAL)

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  • Blog

    Stock Market Imitates Wile E. Coyote

    by Chris Martenson

    Sunday, March 16, 2008, 2:24 AM

    0

    To many in the credit markets, the stock market
    looks a lot like Wile E. Coyote. It’s already way past the edge of the
    cliff. Equity investors just haven’t realized it.

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