Jimbo

WHY DO BONDS TRADE LIKE CRYPTO Because they occupy (nearly...almost) the same space on the Greater Fool Asset Curve. (A curve they never taught at University ...but exists is real world economics). Bonds used to be rather safe assets...but their position on the curve depends entirely on the actions of central banks. When the CB's print and inflate they move bonds out along the GFAC....towards the position that crypto currently occupies. The theft of bond value....in the form of inflation is a close substitute to the lack of an income stream that is the characteristic of GFA's such as crypto. So bonds in an inflationary environment behave as synthetic GFA's. As they go out along the curve the volatility increases....

JEFFERY GUNDLACH SAYS BONDS ARE CHEAP I beg to differ The FED will have to pivot at some point to save the bond market....just look at the UK...... This will mean inflation and soft default and eventually higher rates.... The market is anticipating this....more printing..... Hard default will not be allowed by the FED as it will be too catastrophic.... Its quite happy to see the greater fool assets...SPACs, Crapto, memes etc lose all their value..... But it wont allow large scale corporate default..... It will draw a rate line in the bond market sand and defend it....... Where is that line and when it is reached will tell you when QE6 starts.....

The simple fact is over the last 10 years the bondholders have been fattened for the slaughter by feeding them all the low rate corn they wanted...... Then in 2022 the FED took out the axe............

THE GUILT OF GILT So the UK government decides to go chapter 11 even more quickly than it was...(or is that IMF program...so 70's isn't it...) So the GILT bondholders finally realise they are the bag holders.... What took them so long?????? Anyway now "forced" QE.... Seems like a nice future template for the USA....... "Forced QE" "You save us or we blow up the bond market" It worked so well in Sept 2019. Why should'nt it work again????? Yes we live in an age when blackmailing central banks is the path to wealth and riches......

INTRODUCING A NEW INDEX As you may be aware...I am a bit of a pioneer in the area of Financial Psycological Indexes (FPI's for short} I invented the False Narative Credibilty Index Which measures the credibility level of false narratives. I invented the Kult Index Which measures the level of cultiness of stocks and crapto Now I introduce a new Index....drum roill please......... The SCREAMDEX The screamdex measures the amount of public pressure being placed on the Fed to pivot. Where should the S and P be...... Try the level on 16 September 2019 before all the printing... Before the $500 Billion repo blast.... Around 3000.

The screaming has started. Yes the torrent of fed criticism has begun. More and more public pressure will be placed on the fed to pivot. But pivoting is no solution. It will just lead to more inflation. There are no good solutions left. Can't wait for the requisite Cramer meltdown to "do something". The fed has just let the market find its own level on rates. The calls to pivot are profoundly anti market.

THE CHOICE THE FED HAS MADE....THE CROWDED TRACK So the FED is no longer printing..... Might even do some QT.... Inflation should go down....but not back to 2%...... So where are we now..... We are on the other track....the crowded one..... This is where all the defecit loving governments now compete for the limited supply of capital.....borrowing.....without the FED increasing the amount that can be borrowed.... Its called the "crowding out effect"....I remember the 70's...... I remember seeing the crowding out effect way back then..... Thats what we are having now.....Government defecits crowding out private sector borrowing.... By offering higher rates for the limited supply of debt..... This will be felt in the junk bond market..... And in the housing market.... Then in the investment grade market Already its not pretty..... This will suck debt capital from periphery countries back to the USA.... Que debt distress and default by said periphery countries.... Que rising US$ exchange rate as funds sucked into USA to fund Government defecit.

THE FEDEX CANARY IN THE CONSUMPTION COALMINE Its all very simple. Fedex is the last mile in the cheap chinese stuff industrial complex. This complex....basically Americas "over consumption through over borrowing" complex is powered by the Federal defecit and Fed printing. The engine has been....temporarily at least....turned off by printer Jay. So people can no longer afford their debt based consumption fix.

THOUHTS ON VARIOUS SUBJECTS Re Gold Gold shares are just a bad long term investment....look at the long term charts.... They also tend to pay lousy dividends which is another dead give away. Re the FED If Jay occupies the Arthur Burns chair of monetary printing at Eccles Print U Who will occupy the Paul Volker Chair of Inflation Control????? The contest will be fierce for this position.

SOMETHING GOOD The bond "vigilanties" (or should that be cuddly bond puppies) are sort of waking up from their sleeping beauty sleep. Which is so long overdue..... Because I am tired....so very tired....... of seeing good public companies...the ones that should be in portfolios....taken private by Private Equity carpet baggers...... using cheap/free leverage provided by the FED. Two take privates have collapsed this week in Australia.,..because the debt has gotten more expensive....so the PE can't offer the usual 30% premium over market price to get the deal done. All the good companies were being knocked off the exchange one by one..... The ASX was being hollowed out.... The good companies that paid real dividends were leaving and being replaced by garbage wealth transfer vehicles......with no dividends and insane valuations..... Hopefully this is all over.....

ON LEHMANS AND OTHERS The US mortgage market has already collapsed....who can borrow at 6% to buy a house. The FED will have to intervene and buy massive amounts of MBS..... No one else will run the inflationary risk of owning a 30 year fixed rate security.... European banks are a joke....CS at $5..... Their share prices have dead lined since 2009.....

FINANCIAL JOKE What is the new 60/40 Answer 30/20

WHAT FURTHER IS THERE TO SAY I'm sure there will be support at 3000......... Only minus 25% to go......

YES THERE IS NO BOND SANTA TLT now down 23% YTD Isnt that just wonderful..... When did it top out..... 1 July 2020.....just after the end of the financial year.... A co-incidence....I think not. After all ....when the 2 and 20 fees are in the pocket.....after 30 June 2020 ..... Its time to sell out and run for the hills....... The FED knows there are no good solutions left. And so they have left the markets to there own devices.... A bout of primal scream therapy is in order... The SandP should be trading around 3000.