29th of November, 2007 - bond market experiences a flash crash which is quickly bought up by the FED in an effort to prevent widespread debt defaults. Worked for a few months only for companies to begin defaulting anyway, probably through a series of realized margin or interest spike risks. This is what caused the financial markets to implode in 2008.
Watch and study the bond market, it can tell you more about medium to long-term market direction than any other indicator.
I was looking at this pattern just the other and thought the same thing. The rate at which bonds are currently being propped up to weaken the dollar and keep the stock market in check is spiralling out of control imo. I
zmassey
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I do believe we're in a "melt-up" scenario as emerging market capital is in a state of "flight to safety" ie into US equities, since they're apparently the gold standard.
Derivati_Capital
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@zmassey, Spot on. At this rate the 3mo will yield more than the 10yr within a few months. Apparently nowhere left to find yield but US stocks, least that's the narrative. Once the banks are happy with the level of market saturation, they drop the bond bomb, liquidating into trillions of dollars; quite useful to short the market on the way down. Then begins the transfer of wealth from those poor souls still clinging to the false narrative.