Author Topic: UNLIMITED horrible bond bubble thread.  (Read 7413 times)

Doktor Howl

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UNLIMITED horrible bond bubble thread.
« on: October 26, 2018, 10:06:57 pm »
https://www.msn.com/en-us/money/markets/stocks-end-another-volatile-day-near-correction-territory/ar-BBOUQAP?ocid=spartanntp

What you SEE is the stock market correcting.  What you DON'T see is the bond market correcting.

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Re: UNLIMITED horrible bond bubble thread.
« Reply #1 on: October 26, 2018, 10:09:14 pm »
Quick, tell me how I can take advantage of this for my own personal gain.
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Doktor Howl

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Re: UNLIMITED horrible bond bubble thread.
« Reply #2 on: October 26, 2018, 11:45:48 pm »
Quick, tell me how I can take advantage of this for my own personal gain.

If you have a few million around, put it in Goldman Sachs preferred stock.  They're going to make out like bandits.
"Daisy had syphilis, Tom died of genital warts, and Nick Carroway watched it all in mounting horror, then made off with the silverware and the maid."
~ The Good Reverend

Ecclesiastes 2:14, JACKASS.

nullified

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Re: UNLIMITED horrible bond bubble thread.
« Reply #3 on: October 26, 2018, 11:47:31 pm »
My millions have been redistributed to the hyper-rich before I was born. Damn you capitalism!
“I am that worst of all type of criminal...I cannot bring myself to do what you tell me, because you told me.”

Bruno

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Re: UNLIMITED horrible bond bubble thread.
« Reply #4 on: October 29, 2018, 04:42:18 am »
So what is happening and/or is about to happen to bonds? Also, which bonds? Corporate bonds? Government bonds? All of the above?

Does this have something to do with the fed raising rates? Falling Liquidity? High Corporate debt and also massive Federal deficits thanks to the tax cuts?

Does this pretty much cover it, or is it even worse than that?

https://www.forbes.com/sites/johnmauldin/2018/06/13/yet-another-debt-crisis-is-brewing/#2a1b6509ff57
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Doktor Howl

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Re: UNLIMITED horrible bond bubble thread.
« Reply #5 on: October 29, 2018, 04:22:21 pm »
So what is happening and/or is about to happen to bonds? Also, which bonds? Corporate bonds? Government bonds? All of the above?

Does this have something to do with the fed raising rates? Falling Liquidity? High Corporate debt and also massive Federal deficits thanks to the tax cuts?

Does this pretty much cover it, or is it even worse than that?

https://www.forbes.com/sites/johnmauldin/2018/06/13/yet-another-debt-crisis-is-brewing/#2a1b6509ff57

Well, yes.  But there's more than that.  AA bonds bring in about 25 basis points.  That's more or less written in stone.  People are demanding 65 basis points, and the only way to do that on short term bonds is by gambling with junk bonds.  People have been getting away with this since 2010.  That's about to change, for the same reason the stock market just corrected.


The stock market has been inflated since May of this year, and it just corrected by 10% of it's value.  This is bad in the short run, but it's better than a crash.  Bonds, however, are not regulated and there's no way to rein them in.  So they're going to crater.
"Daisy had syphilis, Tom died of genital warts, and Nick Carroway watched it all in mounting horror, then made off with the silverware and the maid."
~ The Good Reverend

Ecclesiastes 2:14, JACKASS.

Cain

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Re: UNLIMITED horrible bond bubble thread.
« Reply #6 on: October 29, 2018, 05:29:27 pm »
Moody's, Fitch and Standard & Poors have, just like with junk mortgage deals, been overly optimistic on bonds for years.  Government and otherwise.  The UK, for example, is still considered an AA rated country, on a par with South Korea, Estonia and Israel.  This is despite the UK having "the weakest public finances in the world", lagging behind countries such as Gambia and Kenya, and the looming Brexit disaster.

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Re: UNLIMITED horrible bond bubble thread.
« Reply #7 on: October 29, 2018, 06:28:29 pm »
So what is happening and/or is about to happen to bonds? Also, which bonds? Corporate bonds? Government bonds? All of the above?

Does this have something to do with the fed raising rates? Falling Liquidity? High Corporate debt and also massive Federal deficits thanks to the tax cuts?

Does this pretty much cover it, or is it even worse than that?

https://www.forbes.com/sites/johnmauldin/2018/06/13/yet-another-debt-crisis-is-brewing/#2a1b6509ff57

Well, yes.  But there's more than that.  AA bonds bring in about 25 basis points.  That's more or less written in stone.  People are demanding 65 basis points, and the only way to do that on short term bonds is by gambling with junk bonds.  People have been getting away with this since 2010.  That's about to change, for the same reason the stock market just corrected.


The stock market has been inflated since May of this year, and it just corrected by 10% of it's value.  This is bad in the short run, but it's better than a crash.  Bonds, however, are not regulated and there's no way to rein them in.  So they're going to crater.

When you say AA bonds bring in about 25 basis points, do you mean over AAA bonds?

I'm still in the process of learning about this stuff, so I had to google 'basis points'. 25 basis points would be 0.25%, right?
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Doktor Howl

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Re: UNLIMITED horrible bond bubble thread.
« Reply #8 on: October 29, 2018, 06:42:07 pm »
So what is happening and/or is about to happen to bonds? Also, which bonds? Corporate bonds? Government bonds? All of the above?

Does this have something to do with the fed raising rates? Falling Liquidity? High Corporate debt and also massive Federal deficits thanks to the tax cuts?

Does this pretty much cover it, or is it even worse than that?

https://www.forbes.com/sites/johnmauldin/2018/06/13/yet-another-debt-crisis-is-brewing/#2a1b6509ff57

Well, yes.  But there's more than that.  AA bonds bring in about 25 basis points.  That's more or less written in stone.  People are demanding 65 basis points, and the only way to do that on short term bonds is by gambling with junk bonds.  People have been getting away with this since 2010.  That's about to change, for the same reason the stock market just corrected.


The stock market has been inflated since May of this year, and it just corrected by 10% of it's value.  This is bad in the short run, but it's better than a crash.  Bonds, however, are not regulated and there's no way to rein them in.  So they're going to crater.

When you say AA bonds bring in about 25 basis points, do you mean over AAA bonds?

I'm still in the process of learning about this stuff, so I had to google 'basis points'. 25 basis points would be 0.25%, right?

A basis point is one percent of one percent absolute.  No comparison is made between other bonds or as a percentage of prior performance.
"Daisy had syphilis, Tom died of genital warts, and Nick Carroway watched it all in mounting horror, then made off with the silverware and the maid."
~ The Good Reverend

Ecclesiastes 2:14, JACKASS.

Bruno

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Re: UNLIMITED horrible bond bubble thread.
« Reply #9 on: October 30, 2018, 06:37:30 am »
So what is happening and/or is about to happen to bonds? Also, which bonds? Corporate bonds? Government bonds? All of the above?

Does this have something to do with the fed raising rates? Falling Liquidity? High Corporate debt and also massive Federal deficits thanks to the tax cuts?

Does this pretty much cover it, or is it even worse than that?

https://www.forbes.com/sites/johnmauldin/2018/06/13/yet-another-debt-crisis-is-brewing/#2a1b6509ff57

Well, yes.  But there's more than that.  AA bonds bring in about 25 basis points.  That's more or less written in stone.  People are demanding 65 basis points, and the only way to do that on short term bonds is by gambling with junk bonds.  People have been getting away with this since 2010.  That's about to change, for the same reason the stock market just corrected.


The stock market has been inflated since May of this year, and it just corrected by 10% of it's value.  This is bad in the short run, but it's better than a crash.  Bonds, however, are not regulated and there's no way to rein them in.  So they're going to crater.

When you say AA bonds bring in about 25 basis points, do you mean over AAA bonds?

I'm still in the process of learning about this stuff, so I had to google 'basis points'. 25 basis points would be 0.25%, right?

A basis point is one percent of one percent absolute.  No comparison is made between other bonds or as a percentage of prior performance.

So we're talking about 25 basis points yield per year, here? Because I though bonds were more like 1.5%-2%.

My confusion on the details aside, what I'm hearing between Cain, yourself, and all that stuff I said and linked to is...

1.) Liquidity is low and falling
2.) Corporate, Government (federal state, local, GLOBAL, etc), and private debt is at record levels
3.) A large part of that debt is rated below "investment grade"
4.) A large part of that which israted "investment grade" totally isn't
and
5.) The fed is raising rates

and so the entire global financial system is about to strangle itself to death in its web of lies, again.

Am I getting closer?
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Doktor Howl

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Re: UNLIMITED horrible bond bubble thread.
« Reply #10 on: October 30, 2018, 04:25:36 pm »
So what is happening and/or is about to happen to bonds? Also, which bonds? Corporate bonds? Government bonds? All of the above?

Does this have something to do with the fed raising rates? Falling Liquidity? High Corporate debt and also massive Federal deficits thanks to the tax cuts?

Does this pretty much cover it, or is it even worse than that?

https://www.forbes.com/sites/johnmauldin/2018/06/13/yet-another-debt-crisis-is-brewing/#2a1b6509ff57

Well, yes.  But there's more than that.  AA bonds bring in about 25 basis points.  That's more or less written in stone.  People are demanding 65 basis points, and the only way to do that on short term bonds is by gambling with junk bonds.  People have been getting away with this since 2010.  That's about to change, for the same reason the stock market just corrected.


The stock market has been inflated since May of this year, and it just corrected by 10% of it's value.  This is bad in the short run, but it's better than a crash.  Bonds, however, are not regulated and there's no way to rein them in.  So they're going to crater.

When you say AA bonds bring in about 25 basis points, do you mean over AAA bonds?

I'm still in the process of learning about this stuff, so I had to google 'basis points'. 25 basis points would be 0.25%, right?

A basis point is one percent of one percent absolute.  No comparison is made between other bonds or as a percentage of prior performance.

So we're talking about 25 basis points yield per year, here? Because I though bonds were more like 1.5%-2%.

My confusion on the details aside, what I'm hearing between Cain, yourself, and all that stuff I said and linked to is...

1.) Liquidity is low and falling
2.) Corporate, Government (federal state, local, GLOBAL, etc), and private debt is at record levels
3.) A large part of that debt is rated below "investment grade"
4.) A large part of that which israted "investment grade" totally isn't
and
5.) The fed is raising rates

and so the entire global financial system is about to strangle itself to death in its web of lies, again.

Am I getting closer?

Everything that you said is correct, but here's the real killer:

People who issue loans are not connected in any way to the loan after any transfer of the debt.
"Daisy had syphilis, Tom died of genital warts, and Nick Carroway watched it all in mounting horror, then made off with the silverware and the maid."
~ The Good Reverend

Ecclesiastes 2:14, JACKASS.

Bruno

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Re: UNLIMITED horrible bond bubble thread.
« Reply #11 on: October 30, 2018, 06:20:07 pm »
That I knew. Got my mortgage through a local bank a few years back, followed by a series of letters telling me who owns my loan this week.

Eventually it wound up with Wells Fargo.
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Re: UNLIMITED horrible bond bubble thread.
« Reply #12 on: October 30, 2018, 06:40:02 pm »
Speaking of which, did you see the new commercials WF is putting out there?  I almost threw something at my TV.

Bruno

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Re: UNLIMITED horrible bond bubble thread.
« Reply #13 on: October 30, 2018, 07:05:42 pm »
Speaking of which, did you see the new commercials WF is putting out there?  I almost threw something at my TV.

No. No I have not.

What's that about?
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Re: UNLIMITED horrible bond bubble thread.
« Reply #14 on: October 30, 2018, 07:10:51 pm »
Paraphrased:

"After the 1906 San Francisco earthquake, Well Fargo allowed people to withdraw money based on their word alone. Today, Well Fargo continues that tradition of being fair to its customers."