by Chris Black
All this and the Fed has not even tightened yet.
Stocks Suffer Longest Losing Streak In 10 Years, Long-Bond Battered As Fed-Cred Crumbles t.co/v3BFoiporG
— zerohedge (@zerohedge) May 6, 2022
June should be an interesting month.
And the markets have not even woke up yet to the high inflation economy we are in now where corporations earnings/profits get decimated due to people having less discretionary income.
Will be interesting to see the earnings report for 3rd quarter this year.
And the market’s reaction.
In 2018 all hell broke loose when the 10 year reached today’s levels. Housing tanked and stock market sold off.
Interest rates were at 2.5% before Trump bullied Powell into submission.
I go on record and say 1.5% will collapse everything this time due to massive debt load. Most companies have survived by rolling over their debt at very low levels to support their money losing operations (Uber, Lyft, etc.).
The repo market will fall apart since much of the collateral will become questionable just like in 2018.
That’s when the real fireworks will start when credit dries up due to junk collateral.