Bond Market Watch

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@o1k - Yes Sir, affirmative. Stoke the coals, spin up the global propaganda machine, deception and flawed fuzzy legal basis for a conflict.
US and UK are being supported by Saudi and Qatari money................turn that tap off and death spiral happens.
 


Mad as Fish

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They've got skin in the game but even so their argument that a $20 trillion debt is going to feck the US one way or another has a ring of truth about it. I've often felt that the situation is now basically out of control and the economists talk of solutions and polices, austerity and growth, bonds and yields etc is little more than fiddling while the flames are licking at the walls of Rome.
 

HarshBuzz

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The correlation of rising yields is falling bond prices.

Why would bond prices fall? Bond prices could be falling because too many investors are seeking to get rid of the bonds that they hold. It basically means that investor demand for debt has fallen. And any bond debt that there is out there becomes more expensive (hence the rise in yields).

But the really important point is that every other market (stock, futures, options) are predicated on the fortunes of the bond market.
If the bond market cracks every other market will crack.
So the performance of the bond market and the equity market are perfectly correlated? News to me but what would I know...

And futures and options are derivatives, not first order instruments.

Apart from that, you got the inverse relationship between price and yield correct.
 

gerhard dengler

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So the performance of the bond market and the equity market are perfectly correlated? News to me but what would I know...

And futures and options are derivatives, not first order instruments.

Apart from that, you got the inverse relationship between price and yield correct.
No one suggested that there is a perfect correlation.

All that is suggested is because (sovereign) bonds are considered to be the safest of safe investments. Therefore a crash in the bond market would indicate that that safety sentiment had dissipated.

With that dissipation in sentiment, markets with more risky investment classes relative to bond market such as equity markets would also be adversely affected.

This is the point made by commentators such as Pento and Armstrong.
 

Conor

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No one suggested that there is a perfect correlation.

All that is suggested is because (sovereign) bonds are considered to be the safest of safe investments. Therefore a crash in the bond market would indicate that that safety sentiment had dissipated.

With that dissipation in sentiment, markets with more risky investment classes relative to bond market such as equity markets would also be adversely affected.
What if people are selling bonds in order to buy equities?
 

stopdoingstuff

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The question is that with so much new debt having been issued in the last decade, what happens when it all gets rolled over at higher yields.



Also, if this is reflected in rising interest rates on consumer debt and the ability of companies to invest, then what does this mean for demand?
 
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The question is that with so much new debt having been issued in the last decade, what happens when it all gets rolled over at higher yields.


Also, if this is reflected in rising interest rates on consumer debt and the ability of companies to invest, then what does this mean for demand?
It can't be rolled over ultimately.

Someone has to be repaid and at this rate no one will be.
 

okibb

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It can't be rolled over ultimately.

Someone has to be repaid and at this rate no one will be.
Like I said - the IMF are to be the administrators of a massive bail-in by issuing SDR's (Special Drawing Rights) when the SHTF.
 

Boy M5

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A lot also to do with ultra cheap interest rates. Will CBs continue quantitative easing?
No yields or interest rates on bonds have 2 components.
1 is interest rates, the second is pricing of risk.

Risk has been mispriced for sometime.
 

TheWexfordInn

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Have zero faith that money in pension schemes will remain there........................... what is actually backing up assets in pension funds ?

From working in UK in 80's /90's built up an ok pension pot with number of different companies.
When reach age I can remove it then will do so in cash, use that to repay some of buy to let loans.
Need to find a Pension vehicle that will enable me to do all of that.
Plan to hold UK BTLs free of debt, well pension plan may charge 10% int a year on the loans :)
I'm afraid the UK has a couple of weeks ago again changed the Pension rules which now means that once again you cant take your Pension in cash and instead have to buy an annuity.

On the upside annuity rates will go up as per the contents of this thread.

Pension blow for 5m as Treasury U-turn means retirees are stuck with rip-off annuities
 

Voluntary

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It can't be rolled over ultimately.

Someone has to be repaid and at this rate no one will be.
If there's too much debt in the world, central banks print more money, devaluating currencies and making this debt sustainable. This can go forever and ever, similarly to inflation where goods prices increase but inline with the buying power.
 
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I'm afraid the UK has a couple of weeks ago again changed the Pension rules which now means that once again you cant take your Pension in cash and instead have to buy an annuity.

On the upside annuity rates will go up as per the contents of this thread.

Pension blow for 5m as Treasury U-turn means retirees are stuck with rip-off annuities
Wrong

This is about people cashing in existing annuities.

Personal pension pots can be taken because the individual has not yet purchased an annuity.
 


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