FAST FIVE: Blain: If Yields Rise Any Higher, The Melt-Up Will Quickly Reverse

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(I note with some amusement Greece yields less than Italy!)  10-year Treasuries flirted with 2% yesterday – now at 1.90%.  Source: Bloomberg There is massive danger in a reeling bond market.  If we see rising yields morph into a serious bond market meltdown, the melt-up in stocks could split and go rancid very quickly.

The real global growth narrative is far more nuanced than just trade wars: Factor in policy mistakes like central banking monetary policy since 2008 – low rates fuelled financial asset inflation, but not real investment, while political mistakes like austerity-spending imposed massive slowdown.  End that repression, and a recovery in consumer wages and spending back to pre-crisis levels could fuel a spending boom.  That's a short-term positive.

As China slows as its economy turns to consumption, the world slows with it.

I've warned a couple of times that even a modest rise in bond yields could trigger a new bond crisis.

Plan and innovate Climate Cures tech, AI, Robotics, VR, nanotech, 3D printing to build a vibrant future for the UK, and explain how in in terms of the infrastructure we need and the training required to make it happen.

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