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Friday, March 29, 2024

10 Year Drops Below 2.90%

Courtesy of Tyler Durden

For those who are unlucky enough to be on vacation and having to keep track of the deranged lunacy that passes for markets, the 10 Year just dropped below 2.90% as futures turn green! This is so insane, that it makes all the sense in our bizarro world now. Remember, last week we warned of a 10% meltup in stocks and bonds. So far it is working. In Europe, the same thing as Bund stops are triggered, and as 10 year Gilts trade to lowest yields since April 2009. Thank you Ben Bernanke: you have once again destroyed any semblance of logic in the market and driven another batch of traders out of the market: those who have no recourse to lose other people’s money. Bloomberg’s Matthew Lynn sums it best in Risk Is the New Black in World Turned Upside Down: “Investors need to reverse everything they thought they knew about risk. Assets such as property, the dollar and developed-country bonds are only for those who don’t mind losing their shirts. Small-time investors who depend on getting their money back should be buying into small companies, emerging markets and private-equity or hedge funds. We don’t know precisely what will emerge as “safe” once the dust has settled on both the credit crunch and the sovereign-debt crisis. But emerging markets are safer than developed ones, equities beat property, and corporate bonds are preferable to government notes. Sometime around 2015, don’t be surprised if bankers are advising widows and trust funds, which need to preserve capital above all else. They will be offered Turkish bonds, a hedge fund or two, and a portfolio of small emerging-market stocks. Real estate, Treasury bills, and dollar or euro blue-chips will only be for people who fancy a flutter — and have already been warned they may lose everything.” Logic is now dead.

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