The Financial Collapse of 2001 Unwinding Message Board

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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding

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To: Snowshoe who wrote (18)	3/9/2017 9:14:16 PM
From: Snowshoe	Read Replies (2) of 13807

Uber-bear Albert Edwards warns the Fed is about to sow ‘seeds of destruction’ marketwatch.com Published: Mar 9, 2017 5:29 p.m. ET Ever warm and fuzzy, Société Générale’s famed uber-bear Albert Edwards on Thursday warned that the Federal Reserve will sow the “seeds of destruction” in the bond market if it moves to hike interest rates next week as widely expected. “Accelerated Fed rate hikes will cause tremors in the Treasury bond markets, forcing rates up, most especially in the two year — just like 1994,” said Edwards in a report. 1994 marked a historic bond market rout after a rate hike by the Fed that February sent long-term bonds into a tailspin and ultimately led to the bankruptcy of affluent Orange County, Calif., which had borrowed heavily to finance public projects and made risky bets. Meanwhile, expectations for the U.S. central bank to tighten monetary policy at its March 14-15 meeting have been mounting on a stronger labor market and accelerated inflation. The Fed funds futures market is pricing in a 86% chance of a rate hike next week, according to CME’s FedWatch Tool. “I remember the 1994 period as if it were yesterday,” Edwards wrote, observing how the market went into a “total convulsion” despite numerous signs and hints that a rate hike was imminent.

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