Friday, June 21, 2013

Why Did President Obama Just Command, "Short The Bond Market!"

I submit that President Obama must do as he is told. My proof is the constant teleprompter forcing him to state exactly what his rulers request. He will be rewarded for his efforts. His efforts have hastened the demise of America. (Judas was well-compensated too.)

President Obama just ordered investors to short the bond market. Why? It’s time (world power-brokers deem it’s the time to crash world economies).
What is my proof? This is a story from “The Liberator."

(I don’t endorse “The Liberator," or his other stories. I like his evidence, cited here.)
Goldman Slams Abenomics: “Positive Impact Is Gone, Only High Yields And Volatility Remain; BOJ Credibility At Stake”

Moody’s warns on China local government debt, financing vehicles
First Fitch & now Moody’s is worried about China’s massive credit bubble. This could be the black swan event of 2013. The ability of the mainland’s local governments to repay their debt is being questioned, with analysts warning that the liabilities…
China’s LIBOR Is Spiking, And The Central Bank Isn’t Doing Anything About It

‘Overly rapid credit expansion would not be accommodated.’

Ambrose: If Bernanke really shakes the tree, half the world may fall out
We no longer have a free market. The world’s financial asset prices have become a plaything of central banks and the sovereign wealth funds of a few emerging powers.

Julian Callow from Barclays says they are buying $1.8 trillion worth of AAA or safe-haven bonds each year from an available pool of $2 trillion. Nothing like this has been seen before in modern times, if ever.
The Fed, the ECB, the Bank of England, the Bank of Japan, et al, own $10 trillion in bonds. China, the petro-powers, et al, own another $10 trillion. Between them they have locked up $20 trillion, equal to roughly 25pc of global GDP. They are the market. That is why Fed taper talk has become so neuralgic, and why we all watch Chinese regulators for every clue on policy.

We will find out tomorrow whether Ben Bernanke is ready to blink after the market ructions of the last three weeks, sobered by the cascading upsets across the Brics and mini-Brics; or whether he will stay the course with Fed tapering sooner rather than later.

Obama’s recent comments suggest interest rates could soar this year
Did President Obama just give the signal to short the bond market?

In his comment that Ben Bernanke has served as Fed chairman longer than he has desired, the President has certainly provided a clue that Bernanke may be gone as Fed chairman sooner rather than later.
Indeed, it now appears that Bernanke may be a goner by September.

If this is the timeline we are looking at, interest rates may accelerate their current ascent.
Although interest rates have been on a long term down trend for years (In 1987, interest rates on 10-year notes were as high as 10%, and currently stand at 2.19%), there have been periods when interest rates bucked the downtrend.

Two notable periods that have seen upward moves in interest rates were when Fed chairmen departed.
As Federal Reserve chairman Paul Volcker left the Fed chairmanship in August 1987, the interest rate on the 10-year note climbed from 8.2% to 9.2% between June 1987 and September 1987. This was followed, of course by the October 1987 stock market crash…

Here Are The Warning Signs That Preceded The Last 3 Bond Market Crashes
[Shmita Year] 1994: The lead indicators were a pickup in US bank lending and small business hiring intentions, which led to a Q1 payroll shock and caused the Fed to quickly tighten policy.

[Shmita Year] 1987: The October crash was preceded by a dangerous combination of rising stocks, bond yields and gold prices, as well as global policy discord, as the Germans and Americans argued about monetary and exchange rate policy.
1998: Amidst the ongoing Asian Financial Crisis and Japanese bank bailouts, confusion on how much the Fiscal Investment and Loan Program of the government would buy government bonds caused yields to jump by more than 100 basis points in less than three months, which led to a 13% equity correction.


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