We Are In The Process Of Mean Reversion….. A Massive Financial Crisis Imminent?

‘We are headed for a massive financial crisis’ & Fed has ‘no idea what’s going on’ – Peter Schiff

After a stern warning about a calm before an economic storm, investor Peter Schiff has accused the US Federal Reserve of being oblivious to the upcoming crash.
Seeking Alpha quotes Schiff as saying that yields have risen to levels unseen since the last financial crisis a decade ago, with yield curves currently flattening. According to Schiff, that is a troubling sign for the economy in the bond market.

“The 30-year [bond] is 3.15. It’s actually just under 20 basis points. 19 basis points is all you get for taking 20 additional years of interest rate and inflation risk. Think about how crazy that is,” the investor said. “I mean, interest rates, right now, on the 10-year, are just under three percent. On the 30-year, they’re slightly above three percent. But why would anybody believe that three percent yields are here to stay?”

The investor said that those low rates are an aberration if you go back to the Second World War and look at average bond yields. They’ve been low for a long time, but they aren’t going to stay low forever, according to Schiff.

“Clearly, the market assumes that interest rates on 10-year government bonds are going to stay just barely over three percent for the next 20 or 30 years. I mean, that is crazy. Why would anybody think that?” the analyst asked.

Mortgage Applications Dropped for the Fourth Time Since Mid-March

‘Grotesque’ Leverage and Rising Rates Are Already Causing Damage …

Bloomberg22 hours ago

The number-one conversation Societe Generale’s having with clients right now is about the correlation between bonds and equities. But risks to corporate balance sheets is a bigger problem at the moment, particularly in the U.S. and China. Lapthorne said he worries about volatility in debt because of the impact it can

ECB renews vow to keep buying bonds after September ‘if necessary’

Financial Times2 hours ago
The ECB’s benchmark main refinancing rate is zero, with policymakers also imposing a negative interest rate of minus 0.4 per cent on a portion of lenders’ deposits held at central banks. Bar the date at the top, the statement was exactly the same as the governing council’s March decision, saying that the council “expects the …

Houston Faces Debt Crisis Over Retiree Health Benefits

Houston Public Media18 hours ago

The city’s latest monthly financial report shows that Houston has racked up $2.1 billion in debt tied to retiree health benefits, according to City Controller Chris Brown. “We are accruing about $160 million a year in unfunded liability,” Brown says, “and that’s basically because we are consistently underfunding those annual …

Workers and shareholders call GE an ’embarrassment’

Happy birthday, America’s $1 trillion student-debt problem

MarketWatch22 hours ago
Borrower advocates have said high levels of student loan delinquency and default point to student-loan companies hired by the government not doing enough to work in borrowers’ best interest. “I often hear that the big numbers are not necessarily what we should worry about with regard to student debt, but at some point it …

Workers and shareholders call GE an ’embarrassment’

CNNMoney20 hours ago

Other retirees lamented GE’s $29 billion pension deficit, the largest among S&P 500 companies. They questioned whether the pension fund, whittled by years of low rates and inattention, will be around to support them. Flannery said the pension fund is running a “significant deficit,” but he said maintaining its integrity is “a ..