Archive for May 2015

Credit Markets have Melted Overnight. Derivatives are a $1 Quadrillion “Ticking Time Bomb”

I find this article of interest, though I cannot say I know what it means. I share it because it could be a significant marker and no doubt some of you are better able to assess this than I. I quote:

That didn’t take long did it?  I of course am speaking of the second overnight and global meltdown of the credit markets …in the last four business days!  Before getting into this topic which I believe will soon be seen in retrospect and by historians far into the future as “THE” trigger event…  

…It is so important you understand “what” is happening and have an idea of “why”.  Let me tackle the what part first,  We are witnessing sovereign bonds and their yields move in wider standard deviations than most commodities ever do.  When you hear the word “commodity” you should think “risky risky” because they have wild moves limit up and limit down, it’s the way the game is played and should be expected.

Sovereign notes and bonds are (were) the opposite.  They are THE bedrock of the entire financial system.  They are “supposed to be safe”.  They are supposed to be for widows and orphans.  Sovereign credits are THE core to nearly all retirement funds on the planet.  If everything else fails, it is this sector, government bonds, which should stand tall and stave off the failure of retirement plans.  The action over the last week is anything but bedrock or “stable”, in fact, it is volatility in the bond markets that are endangering everything financial, suffice it to say “a foundation of BAD credit is not foundation at all”!

I commend this article to you.

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