20 sats \ 4 replies \ @TomK 13 Aug 2023 \ parent \ on: Bonds are no longer the safe option bitcoin
And You can follow them losing control over their yield curves. German 10Y e.g. has been clearly pegged to 2.5 and cut through it on friday. Same happened to all the others in the Eurozone. Chrissie can try defending the yield spreads to the ust but will be loosing the currency war then. She can't safe both - and Japan could be the killer if they let rates rise some more
Do you have a prediction as to how this plays out, and a ballpark time frame? I know everyone is guessing at this point, but I like your perspective.
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My timing on markets really is the worst You can imagine. But if I wouldn't need to put a time frame on it I am watching Europe as the potential first (and big) domino to send signals of real trouble. Their structural problems (the dysfuncional banking and currency union) and their gigantic miscalculation of sanctioning their ''energy and commodity dealer'' no. 1 makes them, at least in my opinion, a classical candidate to enter the downward spiral first. Maybe it's good advice to put europ. banking stocks on the watchlist, as indicators of economic seismic chocks besides the bond market. But after the covid intervention I have problems timing these processes. But: the debate on CBDC here in Europe is heating up in recent days. Maybe there is more pressure on the pot...
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The Italian banks are usually on the brink, right? And what about Deutsche Bank? Also, UBS after being force fed CS?
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The swiss banks obviously got the Fed on their side. They immidately received usd swap lines when they were needed. Italian banking is the crisis in persona - therefore I have an eye on Deutsche, some state funds and the french institutes. Question is: how deep will the impact on german fiscal deficits be when recession bites in the books?
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