Bond Market Meltdown on Thin Ice: Part 2
"Whats that noise??" Carnival Cruises (CCL) lowering forward guidance; Best Buy (BBY) disappointing Q2 results; Microchip Technology (MCHP) issuing a Q1 revenue warning...
"Sounds like its coming from the woodshed." the recent 10.5% bond market plunge, which sent the 10 yr from 4.7% to 5.32%; is just the start of things to come.... if energy & bond yields do not pull back...
Latencies: The gravity of higher interest rates will not show its full effects in the housing market until June, July and August. As the disasterous nature of those economic numbers is realized...
"And it sounds very nasty indeed." through their direct effect on GDP and other macro metrics, equities will begin their swoon in earnest and the Fed will be forced to lower by Sept or Oct.
"How nasty could it get? or Shades of LTCM??"
#1 US Hedge Fund Broker Bear Stearns offered $1.5B in loans to bail out its failing hedge fund arm, but only if creditors Merril Lynch & JP Morgan kick in $500 Million in cash.
Bear Stearns, seeking to stave off liquidation of the fund, made the commitment yesterday in a meeting with creditors after losses forced the sale of $4 billion of mortgage bonds last week.
Merrill Lynch and JPMorgan had planned to sell another $800 million of bonds of so-called collateralized debt obligations owned by the fund this week.
"Your gonna need a bigger boat"... All three may be considering a bailout because asset sales could force them to revalue their own investments and those of other funds they lend to and....
The value that assets are being carried at may well be proved to be far above what they're really worth. Oh dear...
"Sounds like its coming from the woodshed." the recent 10.5% bond market plunge, which sent the 10 yr from 4.7% to 5.32%; is just the start of things to come.... if energy & bond yields do not pull back...
Latencies: The gravity of higher interest rates will not show its full effects in the housing market until June, July and August. As the disasterous nature of those economic numbers is realized...
"And it sounds very nasty indeed." through their direct effect on GDP and other macro metrics, equities will begin their swoon in earnest and the Fed will be forced to lower by Sept or Oct.
"How nasty could it get? or Shades of LTCM??"
#1 US Hedge Fund Broker Bear Stearns offered $1.5B in loans to bail out its failing hedge fund arm, but only if creditors Merril Lynch & JP Morgan kick in $500 Million in cash.
Bear Stearns, seeking to stave off liquidation of the fund, made the commitment yesterday in a meeting with creditors after losses forced the sale of $4 billion of mortgage bonds last week.
Merrill Lynch and JPMorgan had planned to sell another $800 million of bonds of so-called collateralized debt obligations owned by the fund this week.
"Your gonna need a bigger boat"... All three may be considering a bailout because asset sales could force them to revalue their own investments and those of other funds they lend to and....
The value that assets are being carried at may well be proved to be far above what they're really worth. Oh dear...
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