mish, <<Yields on 10-year US Treasuries have risen above 5pc for the first time since 2002 on heavy selling by big institutions>>
It all could prove to be a much more exciting development than currently evident, with CNBC talking about it in excruciating detail, with graphs, charts, and computer simulation, rather than a bland line item on Bloomberg.
I imagine the sell-down of treasury is part of start to carry unwind, same same with what is happening to NZD and Icelandic K, and given the feared size of the carry trade, just getting started ... you know, pre-dinner drinks, awaiting appetizer, of a 2-main course meal.
This unwind development, when carried to its logical conclusion, with the logic being 'the most outrageous is saved for the end', is the same sort of herd move that at one time saw JYen breach 85 to the dollar.
I remember that earlier unwind episode well, with a buddy telling me proudly what a bargain he got by buying a secondhand Mercedes double digit V, and several days later, after a evening margin call, he was out the price of two new Mercedes double digit V, inclusive of the traditional 100% duty.
A margin call right before one retires for the late evening news can be quite rude, I figure.
Of course, this next round of galaxy-wide repricing may happen via asset re-price triple waterfall style, and/or dollar implosion, 1971 manner, what with foreigner-financed war that will never end until exhaustion time, ineffectual bipartisan political leadership in all three branches of comic proportions, and the very much larger dollar holdings everywhere around the galaxy.
The stage is set for drama, comedy, tragedy, and learning of the biblical sort.
The antidote is, as always, pretty obvious, and the market knows it well, explaining why all periodic elements webelements.com , without exception I am aware of, rise in valuation.
The market knows; but is the market correct?
In liquidity crunch induced by carry unwind, do all things sink into the abyss? Is there that single momentary juncture when nothing will do except paper money?
I don't know enough to feel confident, just aware enough to be very afraid.
Chugs, J |
