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GLOBAL DISASTER BOARD, End of the World Is Nigh?!?
Mork
post Posted: Oct 20 2014, 11:56 AM
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In Reply To: flower's post @ Oct 20 2014, 08:34 AM

Attached a chart of the US 30yr treasury bond yield (not price)

Current yield is still comfortably above the lows set back in 2012. It actually looks like a pretty standard retracement at this stage from the first big move up in yields.

Attached File  30yr_yield.pdf ( 471.76K ) Number of downloads: 12



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flower
post Posted: Oct 20 2014, 08:34 AM
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In Reply To: nipper's post @ Oct 20 2014, 07:19 AM

QUOTE
This explains the dramatic collapse in US bond yields last Wednesday, which came as a number of big hedge funds scrambled to unwind their loss-making positions. In tumultuous trading, the yield on 10-year US bonds plunged by 34 basis points to hit a low of 1.86 per cent as hedge funds, which had shorted US bonds in expectation that bond prices would fall, rushed to close out their bearish bets by buying bonds (bond prices and yields move in inverse directions).

Meanwhile, in Europe, hedge funds are haemorrhaging as interest rate spreads are again blowing out on concerns about the bleak economic outlook. Investors are again selling the bonds of "peripheral" countries such as Greece, Italy, Spain and Portugal which are seen as riskier and are flocking into safe investments, particularly bellwether German bunds.

As a result, the spread between 10-year German bunds, which yield 0.82 per cent, and the yields of the "peripherals" is again widening. For instance, the spread between German bunds and10-year Greek bonds has climbed from 464 basis points (4.64 per cent) in early September to 816 basis points last Thursday, evoking memories of the euro zone debt crisis when the difference between German and Greek borrowing costs blew out to more than 1,000 basis points.


Hi nipper, that will do brilliantly by way of explanation, the salient point being that last Wednesday's bond yield move was the biggest ever, even bigger than what happened in 2008 as Lehman went bust, if that wasn't bad enough for those of us who remember that day only too clearly, is the fact the bond move was the precursor to the dramatic worldwide stock market sell off, we can only hope that history doesn't repeat or even rhyme, what we do not need right now is a major market crash, or conversely perhaps that very move will convince the FED that they have lost the plot big time and be forced into a complete rethink about the whole QE policy and what now needs to happen, remember----- the FED next meet in 9 days time.



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Combining Fundamental comments with Fundamental charts.
 
nipper
post Posted: Oct 20 2014, 07:19 AM
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In Reply To: flower's post @ Oct 19 2014, 03:52 PM

Hedge fund scramble - AFR
QUOTE
At the beginning of the year, the "smart money" investors positioned themselves to take advantage of a pick-up in global growth. They shorted US bonds in the expectation that stronger growth would prod the US central bank into raising interest rates next year. And they poured money into Europe, attracted by the relatively attractive market valuations, and the generous yields they could pick up by the bonds of countries such Spain and Portugal.

But their assumptions have proved disastrously wrong. Disappointing growth in Europe and China has sent commodity prices and the oil price tumbling. At the same time, growing global deflationary pressures – the US producer price index fell in September for the first time all year - have weighed on US bonds, pushing yields lower. Badly wrong-footed, many hedge funds had little choice but to try to stem their bleeding by offloading investments in an illiquid market.

This explains the dramatic collapse in US bond yields last Wednesday, which came as a number of big hedge funds scrambled to unwind their loss-making positions. In tumultuous trading, the yield on 10-year US bonds plunged by 34 basis points to hit a low of 1.86 per cent as hedge funds, which had shorted US bonds in expectation that bond prices would fall, rushed to close out their bearish bets by buying bonds (bond prices and yields move in inverse directions).

Meanwhile, in Europe, hedge funds are haemorrhaging as interest rate spreads are again blowing out on concerns about the bleak economic outlook. Investors are again selling the bonds of "peripheral" countries such as Greece, Italy, Spain and Portugal which are seen as riskier and are flocking into safe investments, particularly bellwether German bunds.

As a result, the spread between 10-year German bunds, which yield 0.82 per cent, and the yields of the "peripherals" is again widening. For instance, the spread between German bunds and10-year Greek bonds has climbed from 464 basis points (4.64 per cent) in early September to 816 basis points last Thursday, evoking memories of the euro zone debt crisis when the difference between German and Greek borrowing costs blew out to more than 1,000 basis points.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time."
- Dr John Hussman

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flower
post Posted: Oct 19 2014, 03:52 PM
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Couldn't find the correct thread to discuss the bond market, not one of my stronger suits anyway, but according to many some worrying trends are developing in the bond market in relation to current yields.

The quite dramatic change in yields last week is apparently reminiscent of September/October 2008 as Lehman's went belly up.

Can somebody better versed in the bond market try and explain--perhaps with a chart or two of today's bond market situation compared with that of October 2008.

Would be very grateful is somebody could assist, because IMHO all is not well with the whole market as it gyrates wildly.

Is something really big about to happen--is the bond market warning us?



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triage
post Posted: Mar 16 2014, 06:55 PM
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In Reply To: Alethia's post @ Mar 15 2014, 11:50 AM

Alethia

QUOTE
Personally I think nothing will happen.


Well I hope you are right. My comments are solidly based in ignorance of the facts on the ground - for instance seeing how Crimea used to be part of Russia until the 1950's and seeing how ethnic Russians make up the bulk of the population there perhaps it is all a bit of a non-event. But seeing how I posted on the tin-foil-hat thread I felt obligated to zerohedge my post and play up the worst possible scenario.

For what it is worth I came across this article this afternoon that actually seems to give respectability to one of my wild assertions: that at least some of the anti-fracking, anti-gas lobbies that are frustrating unconventional gas development in the West are funded and motivated by Russian opertatives. (...talk about monkeys with typewriters in me getting even close to a plausible story ...)

QUOTE
At the end of last year, the European Union took an important step in this direction with the establishment of the Southern Gas Corridor. This pipeline will begin in Azerbaijan’s massive Shah Deniz gas field and end in Italy, connecting seven different countries. The project will reach some of Europe’s most vulnerable nations and most likely help lower gas prices there....

...It should not be surprising that the Southern Gas Corridor has caught Moscow’s ire. Russian-run Gazprom is attempting to buy up gas transit and transmission infrastructure along the pipeline route to try to undermine the project. Even more insidious, it has paid environmental movements to try to stymie construction with environmental claims. This is not the first time that Gazprom has used bogus environmental movements to promote its interests. It has also funded anti-fracking campaigns in Europe, including in Ukraine and Bulgaria, to slow Europe’s development of local gas supplies. If public watchdogs in Europe do not monitor and publicize Russia’s manipulation of environmental causes, distinguishing its claims from those of legitimate environmental organizations, it will find itself increasingly dependent on Russian gas imports.


http://www.foreignaffairs.com/articles/141...peline-problems

Wow! Whoda thunk that the Liberal premier of NSW, Barry the BOF, and his right-wing agrarian socialist mates in the National Party have been willingly doing the hard-yards on behalf of Czar Vladimir and Gasprom (what adds insult to injury is most probably the buffoons have been doing so pro bono).

Anyway the author of the article seems to totally miss the idea that the Europeans would be better off fracking their own shale deposits rather than ship or pipe gas in from elsewhere so maybe the main point to my previous post is a out-and-out crock (?).



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle
 
Alethia
post Posted: Mar 15 2014, 11:50 AM
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In Reply To: triage's post @ Mar 15 2014, 10:22 AM

Personally I think nothing will happen. Crimea will became part of Russia. America will do nothing. It will huff and puff, but America is like a poker player holding the weakest hand at the table and trying to bluff. EU will do nothing.

Next comes the problem for Russia of getting to Crimea through Ukraine. Similar to Kaliningrad next to Lithuania.

Probably fast track a bridge across the Kertsch Strait.

Lithuania is not happy about Russian transport going across Lithuania, but Russia keeps making noises about how the planning and project is on track. LOL



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triage
post Posted: Mar 15 2014, 10:22 AM
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I see that the paralympics that are being held in Russia end tomorrow (their time) ...

... admittedly I'm a tad biased in that I have long held the view / prejudice that Russia is under the control of crooks and crazies but I expect that once Mr Putin gets his photo opportunity at the closing ceremony out of the way he will unleash a wave of shock and awe on numerous fronts as he makes his next move in re-establishing the Russian empire.

The obvious focus will be a military offensive into parts of Ukraine as he secures the safety of ethnic Russians from the neo-nazis. Also an obvious focus will be the threat of cutting off the supply of gas into and through Ukraine on the basis that the Ukrainians have defaulted on paying their bills to Gazprom. He will likely also threaten to crash the financial systems in the West in retaliation for the EU and the US threatening to impose financial sanctions on Russia and its wealthiest crooks.

Given that Russia's current bout of macho is almost entirely funded by petrodollars my guess is that that will be where the yanks go after Mr Putin in the longer term. I have read it described that the US's cracking of tight shale with fracking is the most significant geopolitical change of the current decade - personally I'm not sure about the longevity of the shale boom but if it lasts then the ample and cheap supplies of hydrocarbons to the US does seem to change lots of calculations - and I reckon that western Europe will attempt to relatively quickly develop the substantial shale areas in places like the UK and Poland. But how things play in the next couple of weeks is a mystery to me.

Here's a thought from tin-foil-hat land .... how much has the likes of the Lock-the-Gates groups and the Greens, the Nationals and Barry O'Farrell been effectively aiding and abetting Russia in its attempts to ensure that the world remains unhealthily dependent on Russian gas??? (Also remember that it was the Russian Central Bank last year that was at the forefront of holding the Aussie at unsustainably high levels - the Ruskies are many things but the best of them are not stupid imo.)

Obviously I have not a clue how this will play out but I presume that Mr Putin will continue being entirely unreasonable but very rational in what he is willing to try on ie he is no doomsday cultist [unlike some in the US right and many in the Middle East].



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle

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mullokintyre
post Posted: Jan 24 2014, 08:31 AM
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Ever get that feeling of Deja Vu??
Thirteen years ago, Argentina was plunged further in to an already chaotic state when it defaulted on USD$95 billion of debt to the rest of the world. It followed weeks of rioting, blackouts, looting and strikes.

Well we are seeing just that again. However this time, they reckon total debt is only up to 50 billion this time.
Bond insurers believe there is an 80% chance of default within 5 years.
Could a default in Argentina be the tipping point for the next GFC??

Mick



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flower
post Posted: Oct 16 2013, 10:35 AM
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Overnight from The Washington Post:

US Credit Rating to go to "D"?

http://www.washingtontimes.com/news/2013/o...;utm_medium=RSS



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henrietta
post Posted: Apr 27 2013, 08:01 PM
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Paul Kelly paints a sobering picture of Australia's immediate future.

QUOTE



Cheers
J


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