If markets continue to plunge and more importantly, if yields continue to plunge, expect the fed to act imminently. There is no way they will wait 6 weeks (the next fed meeting Sept 25-26) to lower rates if this continues.

As of this writing, our 10 year yield is now down to 1.64%. Fed funds are 2-2.25%. The fed could cut 1/2 point easily and that is to just play catch up.

The most asked question is how can people continue to buy bonds around the globe that are yielding negative. IT IS SIMPLE. Greed! Forget the yields for a second. BOND PRICES have been skyrocketing. Why do you think people have bought a fake meat company with $200 million of sales with nothing but losses with a $14 billion market cap? Greed. It was moving higher. The hope was just sell to someone else. Screw valuations. That is what you are seeing in worldwide bonds.

We have news for you. There will eventually be gigantic, gargantuan, out of this world losses in world bond markets when this greatest of central bank-induced bubbles ends. We just do not know when it ends but we must tell you it feels like the climactic stage is at hand.

Markets are simple here. We have now entered a bearish phase of unknown price and time. All major indices are trading below the 50 day average. We are now headed towards the longer-term 200 day average. Most leadership has quickly broken support. The big worry remains all the leverage built up in the system enabled by maniacal central banks not to mention the $250 trillion of debt around the globe. Just don’t worry because sycophantic economists and corrupt politicians say it is all manageable. The president made a serious mistake with these latest proposed tariffs. We suspect there was no chance he would follow through with them but China’s reaction may have boxed him in. As always, the fed will again try to defend the markets. Every time in the past, the fed intervention has stanched the bleeding and turned markets back up. Next time?

But the Mets are now 2 games above .500 and very close to the wild card.

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    Victor says:

    to your Mets. Can you talk about what happens to corporate bonds if what you are describing with Government bonds come to pass? I’m about 99 percent on that because of the nausea in the market. You taught me that. I’m not very savvy and I can say that I listened to your holiday show more times than I can count and sometimes I still do just to refresh my aging mind. I can say to your listeners that you taught me to protect my money first and not be greedy. Too many of my friends get so emotional when the market goes down but don’t do anything to sleep without worrying because they believe the market should go up always. I tell all of them to listen to your teachings but a lot of them just want to believe the Market should never go down. Thank you again for giving me the peace of mind to act when the signs you teach are present. Thank you again Gary.

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