They’re dumping anything risky for safety. It’s getting unruly & dangerous. And it may only be just the beginning.
No, I’m not talking about this somewhat pedestrian crypto selloff. This drop to $8k is nothing.
Look at stocks & bonds. It’s teetering on sheer lunacy. US bonds are going straight up. That means rates are plummeting.
Fear is in the air.
Practically speaking, we haven’t seen a move like this since 2008 pre-Lehman. We’ve seen bull markets in bonds in the intervening years; but this flip-flopping we have not seen in over a decade. At Christmas, bond traders were pricing in 3-4 rate hikes this year; today the same scared-out-of-their-schizophrenic-mind-bond traders see 1-2 rate cuts by Labor Day.
Why. In a word: #TrumpChinaTariffs
OK – that’s three words. Famed bond-king billionaire Stanley Druckenmiller, speaking about the Fed: “They’re going to do the works. Stuff that I thought was brilliant in 2009 and should be used once every 50 years is now being discussed as part of the toolkit even for like a recession. I can easily see 2 Years going to zero, and I would say odds are very high they would cut 50 to a 100 bps in the next year. Everything I see out of central banks globally is radical policies ahead.” Radical policies ahead. Okey, dokey.