“Do you not think this global bond bear market is going to break the US economy and equity bull market?” (No.)

“Are you really feeling that lucky?” (Yes.)

The questions are from SocGen’s Albert Edwards. The (humorous) answers are mine.

Admittedly, I’m not as confident in my sanguine assessment as Edwards surely is of his armageddon prognosis. Indeed, I said repeatedly last week that the US stock rally likely can’t run much further unless Treasury yields recede.

So, I’m actually inclined to agree with Albert that we’ve reached an inflection point beyond which equities will struggle absent an abatement in the bond rout. I also agree that Main Street America needs higher 10-year Treasury yields about as much as it needs $5 gas, which is to say not at all.

But there’s very little in the way of evidence to suggest the US economy’s close to a breaking point, and although the semi rally’s plainly overcooked (if it were a steak, I’d send it back to the kitchen in disgust), that’s something different from saying a stock meltdown’s imminent, which it always is, according to Edwards.

Albert’s latest, released on Thursday, was notable not so much for the obligatory doomsday prediction, but rather for the attention he drew to JGBs, the locus of concern for DM bonds (along with gilts).

As I put it earlier this week, Treasurys are getting a lot of spillover from the UK and Japan whose fiscal woes are arguably more acute than America’s. Donald Trump, I chided, made things worse by starting a war which threatened to torpedo the trade balance for energy importers.

“With Sanae Takaichi now talking about a supplementary budget to cushion the effects of the war, the JGB market has gone into meltdown,” Edwards wrote Thursday, editorializing around his version of the figure below.

The chart shows you the extent to which the yen’s now totally detached from rate diffs, a key (normally the key) fundamental driver for FX.

That divergence, Edwards said, constitutes “the clearest evidence that unsustainable government debt dynamics really do matter.” The yen’s sustained weakness despite rate diffs moving demonstrably in favor of the currency raises the specter of a “debt crisis,” he went on to warn.

The figure below, which Albert also highlighted Thursday, shows you the diverging fortunes of the 2s10s curve in the US versus Japan.

Albert called that “the best way to gauge just how much the BoJ has lost the confidence of investors.”

To Edwards, it’s “pretty obvious that the end of Japan’s crazy-easy QE programs and a return to ‘normality’ are having a major deleterious effect on other G7 bond markets.” (No argument there.)

This is where I’m obliged to point readers in the direction of an exceedingly rare on-camera interview with Edwards, who sat down last week to chat with Bloomberg’s Tracy Alloway in what Albert described as “a wide-ranging discussion about the current [macro] situation” and why he expects “a return to double-digit inflation.”

So, go watch that, everybody. Go watch my friend Tracy interview my acquaintance Albert. Here’s the link. It’s free. And I’m happy to post it. Because that’s what friends and acquaintances do for each other. They endorse each other and they cross-promote. And if they have an enormous social media presence, they use it to help each other out. Right?

(Don’t worry, guys. It turns out this business is no different from any other I’ve ever been in. What matters is having the best, most consistent product at a fair price, not whether you can cajole a “somebody” to promote you. Different game, same rule: Good product sells itself.)