WARNING: Bond Market Collapse is Imminent: Get Ready | |
Evan Almighty User ID: 239608 United States 10/13/2008 04:25 AM Report Abusive Post Report Copyright Violation | |
itdincor User ID: 493005 United States 10/13/2008 04:44 AM Report Abusive Post Report Copyright Violation | This week, the next, who knows? But credit card debt is unwinding, bonds, commercial real estate, liquidity, letters of credit, derivatives, no trust, no confidence .... I've read there's over a quadrillion dollars' nominal worth of derivatives of all sorts. Worth from 5% to 90% of nominal valuation. I just can't see how a true crash can be prevented. Some days I find it hard to believe what I'm seeing, but there it is.... Just didn't expect to live long enough to see it, and almost regret that I have. What a mess! It's out of control, IMO. |
Anonymous Coward User ID: 506323 United States 10/13/2008 10:35 PM Report Abusive Post Report Copyright Violation | "The authorities keep saying that they will “use all tools available to them”. They only have one…it’s an electronic version of the printing press. They will spin it in many different ways using jargon like “increased liquidity” and “injection of capital” and “buying equity stakes” and “buying toxic debt” but it all translates to “create more money out of thin air”. Gold and silver and the mining equities will be the place to be and soon thereafter commodities in general." Inflation or Biflation is definitely gonna do us in if history repeats itself. |
itdincor User ID: 493005 United States 10/14/2008 06:36 PM Report Abusive Post Report Copyright Violation | |
mizerock User ID: 42318 United States 10/14/2008 06:40 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 515748 United States 10/14/2008 06:41 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 525707 Canada 10/14/2008 06:42 PM Report Abusive Post Report Copyright Violation | This week, the next, who knows? But credit card debt is unwinding, bonds, commercial real estate, liquidity, letters of credit, derivatives, no trust, no confidence .... Quoting: itdincorI've read there's over a quadrillion dollars' nominal worth of derivatives of all sorts. Worth from 5% to 90% of nominal valuation. I just can't see how a true crash can be prevented. Some days I find it hard to believe what I'm seeing, but there it is.... Just didn't expect to live long enough to see it, and almost regret that I have. What a mess! It's out of control, IMO. It is more than just a crash, that would be bad enough, it is complete destruction of world financing. |
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Anonymous Coward User ID: 526206 United States 10/14/2008 06:55 PM Report Abusive Post Report Copyright Violation | Muni Bonds aren't selling either: Munis Slide, Prompting Deal Delays; California Presses Ahead By Jeremy R. Cooke Oct. 14 (Bloomberg) -- U.S. municipal bonds slid, deepening the tax-exempt market's worst rout in at least two decades and prompting another round of delays for long-term debt offerings from Massachusetts to Ohio. California is pressing ahead with a $4 billion sale of short-term notes, offering preliminary yields as high as 4.5 percent on debt due next June. At least four other deals larger than $200 million, including sales by Ohio and the Massachusetts Bay Transportation Authority, were postponed, according to data compiled by Bloomberg. ``As I understand, we are on hold along with most other large new primary market issuances,'' said Larry Scurlock, assistant debt manager for Ohio. Issuers are struggling to thaw a freeze in the municipal market that has quashed borrowing since mid-September as mutual funds and other institutional investors sell holdings to raise cash and meet redemptions at a time of weak demand and tight credit. Tax-exempt bonds have lost almost 8 percent so far this year, accounting for price swings and interest income, heading for their worst annual performance since Merrill Lynch & Co. started the total-return Municipal Master Index in 1989. Yields on top-rated 30-year general obligation bonds began the week at 5.71 percent, the highest this decade, based on a daily index compiled by Municipal Market Advisors. Municipal issuers sold only $4 billion in fixed-rate bonds the past three weeks combined, according to data compiled by Bloomberg. That's down from a weekly average of more than $6 billion for the year through Sept. 12. `Jaw Dropping' Recent price declines have been ``jaw dropping,'' said Tony Shields, senior vice president at securities firm Grigsby & Associates in New York, in an e-mail. On Oct. 10, Shields said, he sold some California bonds due in 2026 at a price to yield 5.75 percent, and a half hour later similar bonds traded at 6.15 percent. ``Bids are getting cheaper and getting hit, but long retail interest is spotty and not very aggressive,'' Shields said. California general obligation bonds set to mature in 30 years traded at prices as low as 84.3 cents on the dollar today to yield 6.45 percent, according to data reported to the Municipal Securities Rulemaking Board. That's almost 5 cents lower in price and almost 0.4 percentage point higher in yield than a trade Oct. 9. U.S. municipal borrowers had been planning the most debt sales in five weeks, before the latest postponements. On Hold Ohio was to sell $375 million of bonds backed by federal highway aid, and the Massachusetts authority planned to sell $350 million of bonds payable from assessments on 175 towns served by its subway, bus and rail network around Boston. ``Our bond sale has been postponed, and the earliest that it would go would be next week,'' said Jonathan Davis, chief financial officer of the transportation agency. ``We do have time to wait, so there's no major urgency, but we would like to get out in the next few weeks.'' The municipal slump has been exacerbated by a tax rule that means more securities may be taxed as ordinary income as buyers pay deep discounts to face value, said Matt Fabian, managing director at Municipal Market Advisors, in a report today. The so-called de minimus rule permits investors to treat the accrued rise in bond principal value as a capital gain when the discount is less than 0.25 percent per year to maturity, or 5 cents on a 20-year bond. When yields rise and the discounts on existing bonds get deeper than the de minimus level, higher ordinary-income tax rates apply, further eroding their value. ``This `popping out' was largely accountable for the steep selloff last Thursday and Friday,'' Fabian said. To contact the reporter on this story: Jeremy R. Cooke in New York at [email protected]. |
Anonymous Coward User ID: 255704 United States 10/14/2008 07:21 PM Report Abusive Post Report Copyright Violation | What led us to this? The loss of a manufacturing base, combined with peak oil. We'd have never had to rely on derivatives to pump up the economy (bubbles) had we not lost our main source of national income (manufacturing). The final blow was when global oil production peaked/plateaued in 2005 and the final bubble of housing was popped. We had a similar oil shortfall induced deep recession in 1980-1983, but we still had a substantial manufacturing base, and weren't nearly as leveraged. That recession was severe... this one will be significantly worse. |
Anonymous Coward User ID: 526206 United States 10/14/2008 07:36 PM Report Abusive Post Report Copyright Violation | This is deleveraging on a grand scale. This economy has become leveraged to the hilt, and with the addition of derivatives (countless trillions)... it's become outright insane. Quoting: Anonymous Coward 255704What led us to this? The loss of a manufacturing base, combined with peak oil. We'd have never had to rely on derivatives to pump up the economy (bubbles) had we not lost our main source of national income (manufacturing). The final blow was when global oil production peaked/plateaued in 2005 and the final bubble of housing was popped. We had a similar oil shortfall induced deep recession in 1980-1983, but we still had a substantial manufacturing base, and weren't nearly as leveraged. That recession was severe... this one will be significantly worse. Yeah, I know. Whenever I hear the greenies talk about "service -based economy", I want to explode. You can't feed and shelter 300 million people with such a thing. And how does it help the enviornment exactly? You just move the manufacturing polution to poor countries who are ill equipped to regulate it. There wouldn't have been any oil shortfall if we had been exploring alternative energies back in the 70's like Brazil......who is now energy independent. Not that ethanol is our answer.....but no one has been asking the question for 30 years......because that's the way OPEC wanted it. |
Anonymous Coward User ID: 526330 Canada 10/14/2008 07:44 PM Report Abusive Post Report Copyright Violation | "The authorities keep saying that they will “use all tools available to them”. They only have one…it’s an electronic version of the printing press. They will spin it in many different ways using jargon like “increased liquidity” and “injection of capital” and “buying equity stakes” and “buying toxic debt” but it all translates to “create more money out of thin air”. Gold and silver and the mining equities will be the place to be and soon thereafter commodities in general." Quoting: Anonymous Coward 506323Inflation or Biflation is definitely gonna do us in if history repeats itself. They can always hit the "reset" button, and cancel all those derivative debts. Considering how a quadrilion dollars would be pretty hard to pay off no matter what they did. Also considering how all those deriviatives were pretty much based on nothing to begin with. |
Anonymous Coward User ID: 490531 United States 10/14/2008 07:45 PM Report Abusive Post Report Copyright Violation | |
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Anonymous Coward User ID: 526206 United States 10/14/2008 07:52 PM Report Abusive Post Report Copyright Violation | They can always hit the "reset" button, and cancel all those derivative debts. Considering how a quadrilion dollars would be pretty hard to pay off no matter what they did. Quoting: Anonymous Coward 526330Also considering how all those deriviatives were pretty much based on nothing to begin with. The problem is, all the financial institutions, hedge funds and banks want to keep that shadow market going. They like making money the easy way. How do you think they were able to take all the sub-prime, bad credit risks since 1999? They never figured any big boys would go down. Also, without derivatives, banking in UK would cease to exist. They have NO economy whatsoever since they joined the EU. |
Anonymous Coward User ID: 526330 Canada 10/14/2008 07:57 PM Report Abusive Post Report Copyright Violation | They can always hit the "reset" button, and cancel all those derivative debts. Considering how a quadrilion dollars would be pretty hard to pay off no matter what they did. Quoting: Anonymous Coward 526206Also considering how all those deriviatives were pretty much based on nothing to begin with. The problem is, all the financial institutions, hedge funds and banks want to keep that shadow market going. They like making money the easy way. How do you think they were able to take all the sub-prime, bad credit risks since 1999? They never figured any big boys would go down. Also, without derivatives, banking in UK would cease to exist. They have NO economy whatsoever since they joined the EU. So the bottom line is, unless those space aliens show up toot sweet, bringing hundreds of tons of rubys and gold with them as love offerings to the Gods of Wall Street, we're screwed! |
Observer - and furious! User ID: 391855 United States 10/14/2008 08:06 PM Report Abusive Post Report Copyright Violation | Thank You! finally someone who is thinking!! We are being blinded by our love for our country - and losing it to those who PRETEND to love our country - at our expense.... mmmm... reminds me of the origins of what made us americans ! Lack of representation - the ammassing of wealth at our expense - the belief that we could do better without the "so called - protection" of the big powerful king - george.... ? What are we afraid of? I say another tea party - another declaration of Independance from the low-lifes that feed off our hard work and tax us into oblivion, and then make us bail out the most irresponsible, rich and abusive group of individuals on the planet, and then question our patriotism when we are not "on board", and then jail us if we refuse??? This is NOT the America I know. I for one am SICK of this. We have been taken over. |
Anonymous Coward User ID: 185055 United States 10/14/2008 08:13 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 526206 United States 10/14/2008 08:14 PM Report Abusive Post Report Copyright Violation | Thank You! finally someone who is thinking!! We are being blinded by our love for our country - and losing it to those who PRETEND to love our country - at our expense.... mmmm... reminds me of the origins of what made us americans ! Lack of representation - the ammassing of wealth at our expense - the belief that we could do better without the "so called - protection" of the big powerful king - george.... ? What are we afraid of? I say another tea party - another declaration of Independance from the low-lifes that feed off our hard work and tax us into oblivion, and then make us bail out the most irresponsible, rich and abusive group of individuals on the planet, and then question our patriotism when we are not "on board", and then jail us if we refuse??? This is NOT the America I know. I for one am SICK of this. We have been taken over. Quoting: Observer - and furious! 391855The problem is 50% of the population can be "paid off" (through entitlements, govt. jobs and the like) and only 50% would participate in the "revolution". Those aren't good odds. The only upside I can see is that a good part of the armed forces, not the Pentagon pencil-pushers, but the grunts on the ground, would be on our side. Lot of the armed forces folks fell really screwed by the recent oil war, from what I hear. |
Anonymous Coward User ID: 526206 United States 10/14/2008 08:18 PM Report Abusive Post Report Copyright Violation | what happens if / when the bond market collapses? Quoting: Anonymous Coward 185055Govt. defaults, munincipalities and states default. IMF and foreign govt.s up our ass. Assets seized overseas. No incoming goods or oil. Canada will still trade, so would Mexico. We could ride it out but China's reaction could be catastrophic. We owe them 3 trillion. They won't be happy. |