{"id":12532,"date":"2015-09-23T05:59:24","date_gmt":"2015-09-23T10:59:24","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12532"},"modified":"2015-09-23T05:59:24","modified_gmt":"2015-09-23T10:59:24","slug":"the-us-bond-market-is-far-larger-than-the-stock-market-if-even-part-of-it-blows-itll-dig-a-magnificent-crater","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12532","title":{"rendered":"The US Bond Market is far Larger than the Stock Market: If Even Part of it Blows, it\u2019ll Dig a Magnificent Crater"},"content":{"rendered":"

The US Bond Market is far Larger than the Stock Market: If Even Part of it Blows, it\u2019ll Dig a Magnificent Crater<\/a><\/h3>\n

\u201cSo, if rates rise, we get nervous. If rates fall, we get nervous. If rates stay the same, we get nervous. When don\u2019t we get nervous? Raise the rates already! We are talking an idling .25% not 3.5% where we should be to make saving\u00a0pay<\/em>, and borrowing a cautionary endeavor as it should be!\u201d<\/p>\n

That\u2019s the lament posted by a\u00a0WOLF STREET commenter<\/u><\/a>\u00a0on Monday afternoon.<\/p>\n

\u201cPerhaps investors are getting nervous because the price action is so bad,\u201d explained DoubleLine Capital CEO Jeffrey Gundlach on Monday about the selling pressures junk bonds have come under after Fed Chair Janet Yellen\u2019s press conference, which had been, in his words, \u201ca little bit of a debacle.\u201d<\/p>\n

He\u00a0complained<\/a>\u00a0that Yellen had thrown uncertainty and confusion over financial markets, as\u00a0Fed heads \u201ckind of no longer have a framework\u201d to go by.<\/p>\n

He\u2019s always talking up his $80-billion book, which is full of bonds. He has a lot to lose when rates rise and bonds decline in value. So he said that raising rates this year would be a \u201cpolicy mistake.\u201d<\/p>\n

It certainly would be for him, having ridden the greatest bond bull market all the way to its peak while extracting a ton of fees along the way.<\/p>\n

Bond-fund managers like Gundlach already had a few scares to deal with, including the \u201cTaper Tantrum\u201d in the summer of 2013 in reaction to the Fed\u2019s discussions on tapering QE Infinity out of existence, then the \u201cflash crash\u201d in the Treasury market last October 15, and for the past year, the not-so-flash\u00a0crash in energy junk bonds.<\/p>\n

Folks have reason to be nervous about bonds.<\/p>\n

Bonds are supposed to be a conservative investment, safer and more predictable than stocks and a host of other asset classes. But bonds are on edge, and investors can see it. And they can see the sheer magnitude of it.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The US Bond Market is far Larger than the Stock Market: If Even Part of it Blows, it\u2019ll Dig a Magnificent Crater \u201cSo, if rates rise, we get nervous. If rates fall, we get nervous. If rates stay the same, we get nervous. When don\u2019t we get nervous? Raise the rates already! We are talking […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[88,303,305,1154,431,451,9196,661,662,8326,4254,4255],"class_list":["post-12532","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bonds","tag-fed","tag-federal-reserve","tag-interest-rate-policy","tag-interest-rates","tag-janet-yellen","tag-jeffrey-gundlach","tag-qe","tag-quantitative-easing","tag-us-bond-market","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12532","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12532"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12532\/revisions"}],"predecessor-version":[{"id":12533,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12532\/revisions\/12533"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}