I have been thinking a lot about the debt markets lately.
Right now the spread between the 10 and 30 yr bond is just 30 basis points and I said publicly around two years ago that this would happen. I also said that I expect we will suffer another yield curve inversion just like the ones which occurred at the top of the Dotcom and 2008 market meltdowns. In my opinion The Federal Reserve cannot normalize their balance sheet fast enough to prevent another yield curve inversion from happening. Again, the spread between the 10 and 30 in now just 30 basis points so we are close.
This is my concern... The debt market in my opinion is in an epic bubble, moreover the major banks are holding credit default swaps on that debt. So WHEN this debt bubble bursts, and it will at one point just as every single bubble before it has, there is not enough liquidity in the system to cover the CDS and prevent a global Lehman Brothers moment.
***The issue with the major banks holding these credit default swaps, that is guaranteeing that they will pay off the debt in the event of a debt bubble meltdown, puts the entire global financial system in peril... and THIS is the reason why such extraordinary measures are going on right now to keep the bond market propped up.
Gregory Mannarino, "The Robin Hood Of Wall Street." (Is this article important? Then please share it!)
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You have been keeping an eye on the yield curve for quite some time now ... and that whole time it has essentially been flattening. You called this years ago and it looks like the time is coming soon. We just need to get a few more sheeple to get into this market before it comes down.
upvoted and resstem
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Resteemed and upvote Mr Robin hood
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I like your analysis - the number of dominoes that could fall at once in such a scenario is mind-boggling.
I agree that there is a sovereign debt bubble; it's hard to see how that the can can be kicked down the proverbial road indefinitely.
Robinhood the ultimate reporter of market.
Very nice post sir ... really awasome work ...
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It is going to be much worse than 2008. The inverse spread could happen this year though. Markets will come crushing down, precious metals and cryptocurrencies could go up significantly. Very good post, thanks!
People are going to realize corporations have been buying their own stocks with money borrowed in bonds. Once money is hard to obtain the liquidity crunch is going to be epic. Liquidity might be pulled from speculative markets like crypto so a deflationary period isn't a guarantee that crypto prices will rise.
CDS and toxic instruments are held by nearly every major bank and corporation in the world, when the hammer falls it'll be something the likes of which the world has never seen. Strong legislation must be put in place in the aftermath to repeat such a failure to control such dangerous greed, but any nation that does so will see capital flight as investors will continue to chase yield.
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I would think you should be doing these in a bunker. Maybe, think about it every time you turn the car on, Casino style.... Ten years ago, you would have been car bombed to shut you up. Today, the FED could care less. You are talking to 0.1% of the US.
I love it. Keep it coming!
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Reestemen and Upvoted Mr. Robin Hood
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Thanks forbeing on top of evrrything. I've upvoted and resteemed
Looking like trouble with bonds and then a crash I think.
My nerves are shattered. This is scary stuff.
Thanks again, Gregory, I'm watching. Upvoted Resteemed.
Upvoted and resteemed, dude!
Greg, I have watched you for years and you have talked about this many times. The question is, is there anything we can do to prepare, other than buy gold and silver which I am doing. I know as a trader you move in short periods of time but what about long term such IRAs?
Hmm if the banks are all buying CFDs who is selling them?
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Nice work Greg. Here's a question for you. How much is all of the stock markets worth? If shorted to just 3-5% of current value will that cover the CDS with some sort of haircut?
Greg @marketreport, you talked about people not being able to get money out of these banks. Besides gold and silver, do you think it is safer to keep money in brokerage accounts (ie. Etrade, TD Ameritrade) rather than keeping a regular account with these banks? Will this meltdown have any effect on money in brokerage accounts like the ones I listed?
Nice post my friend
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