Something’s Gotta Give: Bonds Most Overbought Since LTCM, Consumer Sentiment At Cycle Peak

Something’s Gotta Give: Bonds Most Overbought Since LTCM, Consumer Sentiment At Cycle Peak

US equities plunged out of the gate on Friday, extending a 7-day slide that made this the second-worst week for US equities dating back to the second world war. From here, things are likely to get extremely interesting, given that the Fed (and other developed market central banks) will almost surely marshal some manner of coordinated response. To state the obvious, it isn't just US equities that are having flashbacks of 2008. The Stoxx 600 has fallen more than 12% over the past five sessions.
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4 thoughts on “Something’s Gotta Give: Bonds Most Overbought Since LTCM, Consumer Sentiment At Cycle Peak

  1. “Amusingly, the data continues to come in solid in the US, just as it did on Thursday.”

    How much chaos should the market price in? The inept response of the Federal govt is what will bring Trump down, and thus the markets. No virus testing being done? Bad test kits? No test kits? Trump clownishly pumping the markets instead of showing he’s on top of the virus situation. I guess the hundreds of billions spent on homeland security never imagined a biological weapon. Shows you we know exactly where to cut the budget.

    P.S – I am very impressed by the quality of the headline graphics for the articles on this site.

  2. The economic statistics that are coming now out should be ignored. We are in a dynamically changing situation. One can be pretty sure that when statistics that come out that are reflective of the Feb-March period, it will paint a pretty dire picture overall. If the Federal Reserve does not step in soon, financial conditions will freeze up in a similar manner to the GFC. The die is being cast right now- flat yield curve, credit spreads gapping out, and an exogenous shock resulting in rapid risk aversion in the markets. We have a leader in the White House whose instincts are to say the least terrible, which is not helping matters. By focusing on the short term as he has throughout his life, he has unravelled the intermediate to long term situation for the country. Relying on political appointees in this situation is incompetent, and enlightened self interest would dictate relying on experts now. That does not seem to be happening. His voters are going to have to learn the hard way, and take the rest of us down with them. As HL Menken has pointed out (I cannot get the quote right, but it is something like the average joe often gets what he wants, good and hard.)

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