Bond crash dead ahead: tick, tick ... boom! Commentary: ‘Investors have no idea what’s about to

Okay folks, I don't trade so rather than introduce my thread with the typical commentary, I actually have a couple of questions to ask of you who do.

I've only partially cited the article, but provide enough information to get the gist of the message, namely a spectacular crash in bonds, apparently one that will be devastating to portfolios.

Now let me ask: Is this scenario even likely?

If raising interest rates would be so catastrophic then why raise them at all if inflation is not surging?

If there was to be a crash in the bond market, wouldn't the Fed just intervene and purchase them en masse for as long as it take as necessary to calm the market?

Farrell is not the only one talking about this possibility, clearly, as he too is citing several different sources. But I've also heard it mentioned elsewhere. Seems like quite a few people are taking note.

Could a bond market crash result in something as bad if not worse than 2008? Perhaps it is all just being overblown for dramatic effect?

Marketwatch

A warning: InvestmentNews wants to make damn sure its readers, the 90,000 professional financial advisers who rely on timeliness and accuracy of every INews forecast: “What will your clients’ portfolios look like when the bond bomb goes off?” Get it? Not if but when it happens.

Yes, they do expect the bond bomb to explode and are publishing “a special report on the impending crisis in the bond market.”

Yes, you heard them. “Tick, Tick ... Boom!” Wake up, it’s an “impending crisis,” dead ahead. And to punctuate their message, InvestmentNews added an alarming photo of an alarm clock with huge bells, wired to rolled up bonds looking like a stack of dynamite sticks. “Tick, Tick ... Boom!”

InvestmentNews is not staffed by a bunch of not alarmists, quite the opposite — conservative, trustworthy and methodical. They know the 90,000 registered investment advisers that rely on them are in turn responsible for advising millions of Americans and managing trillions of retirement assets. Yes, their audience demands reliable forecasts.

So listen closely, we’ll summarize Andrew Osterland’s lead article “Fear Rising With Rates,” along with an interview with Bond King Bill Gross. And INews editorials on “repositioning client money” with “strategies for rising rates.” And a couple of opposing portfolio suggestions: “The case for, and against, stocks.”

The Fed has been buying up all the bonds in an attempt to stabilize the markets, it can't last forever. As for inflation, the evidence for that is everywhere.

Even with the stock market hitting record highs, unemployment is still at depression levels. Despite what the Gov't would like you to believe.

Anyway, I have been hearing a lot of talk. At work about a bond crash lately. I really don't pay attention to bonds, but it wouldn't surprise me in the least.

Let wall street crash we should have never bailed them out in the first place. Wall street and the banks made this mess now let them take the fall. It will be a good learning experience for some of these scumbags to wake up wondering if they are going to lose their house or where they are going to get their next meal from. Just like millions of other Americans are experiencing now thanks to them.

Originally posted by buster2010
Let wall street crash we should have never bailed them out in the first place. Wall street and the banks made this mess now let them take the fall. It will be a good learning experience for some of these scumbags to wake up wondering if they are going to lose their house or where they are going to get their next meal from. Just like millions of other Americans are experiencing now thanks to them.

edit on 20-3-2013 by buster2010 because: (no reason given)

I rearly agree with you but your 100% correct!

The value of the world markets exceeds the value of all the precious metals and the holdings of all governments in the world. That does not make any sense to me, it's all a deception that is going to get exposed shortly as millions lose their money. Of course the deceivers will have already cashed in before this happens, this will make it worse. Insider trading laws are a farce. They only keep the semi honest honest. The ones who are not above the law.

reply to post by buster2010

Let wall street crash we should have never bailed them out in the first place. Wall street and the banks made this mess now let them take the fall.

Unfortunately, it would be the average Joe with a 401k that takes the fall more than the scumbags you speak of. Plus, unemployment would likely skyrocket.

Everyone loses in your scenario except the scumbags that have already cashed out several times over.

Originally posted by buster2010
Let wall street crash we should have never bailed them out in the first place. Wall street and the banks made this mess now let them take the fall. It will be a good learning experience for some of these scumbags to wake up wondering if they are going to lose their house or where they are going to get their next meal from. Just like millions of other Americans are experiencing now thanks to them.

edit on 20-3-2013 by buster2010 because: (no reason given)

So says the guy with most likely no savings. I keep getting this feeling that all the young people want some kind of game reset because it is just not fair that they start out with nothing.

You want to go after a few with little care for tens of millions that save and invest for retirement.

Originally posted by Xtrozero

Originally posted by buster2010
Let wall street crash we should have never bailed them out in the first place. Wall street and the banks made this mess now let them take the fall. It will be a good learning experience for some of these scumbags to wake up wondering if they are going to lose their house or where they are going to get their next meal from. Just like millions of other Americans are experiencing now thanks to them.

edit on 20-3-2013 by buster2010 because: (no reason given)

So says the guy with most likely no savings. I keep getting this feeling that all the young people want some kind of game reset because it is just not fair that they start out with nothing.

You want to go after a few with little care for tens of millions that save and invest for retirement.

I dont want it to crash, its going to suck bad when it crashes. But its going to crash. I have alot to lose but i would rather get it over with now then drag it along.

reply to post by camaro68ss

I dont want it to crash, its going to suck bad when it crashes. But its going to crash.

If you feel that strongly, you should play the other side of the bet. You can make money just as easily on the market going down.

I'm not that confident that it's going to crash any time soon, at least not enough to bet on it.

I have to wonder if these folks writing the doom articles are making that bet as well.

reply to post by Zarniwoop


I want to start off by saying that I like your response. I hadn't thought of that before. However, I still believe that the economy will crash. I just can not reliably say WHEN it will crash. But I've always been a terrible gambler so I generally as a rule of thumb gamble as little as possible.

I also think that it should crash because what we got now isn't working. Unemployment is way to high. Nothing is getting done. How can you honestly say that our economy is healthy with Wall Street at an all time high, meanwhile real unemployment is still in double digits.

U6, the closest to real unemployment that the BLS reports, is at 14.3%. bls.gov Now it's true that U6 has gone done since February of last year, but U6 still doesn't account for people who have given up looking for work altogether. In any case, double digit unemployment is terrible compared to having Wall Street at an all time high regardless of what the number has been doing. If the economy was healthy, the unemployment rate should be in the single digits.

This is just another bubble; all bubbles pop. This one will too. To deny it is to deny reality. The only thing I cannot say for certain is when it will happen. To be honest, if I HAD gambled on the economy falling apart, I would have already lost all my money. I just hope that a better system can rise out of the turmoil that will happen afterwards, because when the system crashes things are going to get a lot worse.

reply to post by Xtrozero

So says the guy with most likely no savings. I keep getting this feeling that all the young people want some kind of game reset because it is just not fair that they start out with nothing.

That’s exactly what it is!!!



It’s no surprise that those willing to go the farthest are those with nothing to lose.

This is just another bubble; all bubbles pop. This one will too. To deny it is to deny reality.

I think the market will go down slowly back down to the 13k level and hang there for a while. I don't think it will crash.

It's more of a guess than denying reality.

reply to post by Zarniwoop


What happened to the thread about the guy who made an 18 million bet on the downside??? Not a stock guy, divested everything to gold,silver and diamonds.

It was more like an 11 million dollar bet

It’s looking like he is going to lose it

reply to post by Xtrozero

Could not agree more X, the folks who will be hurt the most are you and I, middle class people who have spent whole careers saving and investing in our 401ks etc, and in a split second it could all be gone.

I have played by the rules, raised a family, saved when I could and most importantly tried to spend my money wisely, which meant telling those I love on many occasions NO, I cant afford to buy you that.

People who scream "Let It Crash" scare the hell out of me, they obviously have no idea the work and long term commitment it takes to save for retirement. They are just looking for a fast reset of the game.

I personally do not want to live off the governments largess, I planned for my old age, and I want to enjoy the fruits of my labor, it's not a fortune, but I am proud of it, it says something about me (and my wife) and others like us who take life seriously.

reply to post by seabag


It's amazing what being backed up against a wall with nothing to lose will do to you huh? When the government takes and takes while receiving table scraps from the people who are supposed to be employing you, you end up with a no win situation. I know its not a news flash to you, but more of us are growing every day. There is going to have to be a tipping point.

The problem as I see it, is that the recession of 2007-2008, never ended.
We have experienced a jobless recovery (or a McJob recovery) and we are experiencing a never ending series of blasé news.
Will the market crash, yes. Has it recovered enough yet to make it a significant one, I doubt it.
All bets are off when it comes to the EU and Greece however, this could hasten the collapse of the already over borrowed markets, and if that's the case look out,

Originally posted by Xtrozero

Originally posted by buster2010
Let wall street crash we should have never bailed them out in the first place. Wall street and the banks made this mess now let them take the fall. It will be a good learning experience for some of these scumbags to wake up wondering if they are going to lose their house or where they are going to get their next meal from. Just like millions of other Americans are experiencing now thanks to them.

edit on 20-3-2013 by buster2010 because: (no reason given)

So says the guy with most likely no savings. I keep getting this feeling that all the young people want some kind of game reset because it is just not fair that they start out with nothing.

You want to go after a few with little care for tens of millions that save and invest for retirement.

Since when did wall street become a guaranteed payoff? When you play the market you take the chance you may lose your investment. And if I wanted I could retire now but I don't feel like it.

Originally posted by seabag
reply to post by Xtrozero

 

So says the guy with most likely no savings. I keep getting this feeling that all the young people want some kind of game reset because it is just not fair that they start out with nothing.

That’s exactly what it is!!!

It’s no surprise that those willing to go the farthest are those with nothing to lose.

Oh look another one who thinks wall street should always pay off. One day you may grow up and see what's really happening.

Originally posted by Zarniwoop


Unfortunately, it would be the average Joe with a 401k that takes the fall more than the scumbags you speak of. Plus, unemployment would likely skyrocket.

Everyone loses in your scenario except the scumbags that have already cashed out several times over.

The scumbags will loot the 401K's before it even crashes though and leave everyone else with the bag.
I understand what your saying.

The scenario we are facing right now is, the scumbags rape and pillage us through creative accounting and everyone lives on the bare minimum, while they continue the free ride off of dime, are the whole global economy collapses with no where for many (not all) of these rats to run.