{"id":9253,"date":"2015-06-20T06:38:08","date_gmt":"2015-06-20T11:38:08","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9253"},"modified":"2015-06-20T06:42:45","modified_gmt":"2015-06-20T11:42:45","slug":"credit-market-warning-long-awaited-signs-of-danger-are-materalizing","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9253","title":{"rendered":"Credit Market Warning: Long-awaited signs of danger are materalizing"},"content":{"rendered":"<div class=\"article-header\">\n<h3 class=\"article-type\"><a href=\"http:\/\/www.peakprosperity.com\/blog\/93140\/credit-market-warning\" target=\"_blank\">Credit Market Warning:\u00a0Long-awaited signs of danger are materalizing<\/a><\/h3>\n<div class=\"article-type\"><\/div>\n<div class=\"article-details\">\n<div class=\"author-link\">There are large signs of stress now present in the credit markets. You might not know it from today&#8217;s\u00a0multi-generationally low interest rates, but other key measures such as liquidity and volatility are flashing worrying signs.<\/div>\n<\/div>\n<\/div>\n<div class=\"content clearfix\">\n<p>Look, we all know that this centrally planned experiment forcing financial assets ever higher is simply fostering multiple bubbles, each in search of a pin. As all bubbles do, they are going to end with bang.<\/p>\n<p>I keep my eyes on the credit markets because that\u2019s where the real trouble is brewing.<\/p>\n<p>Today\u2019s markets are so distorted that you can reasonably argue that there\u2019s not much in the way of useful signals emanating from them. And I wouldn\u2019t put up too much of a counter-argument. But it&#8217;s my contention that the bond market is the place to watch as it will provide the most useful clues that a reckoning has begun. And when these markets eventually return to earth, there will be blood in the streets.<\/p>\n<p>While some may hope that rising yields are signaling a return to more rapid economic growth, or at least that the fear of outright deflation has lessened, the more likely explanation is that something is wrong and it\u2019s about to get&#8230;\u00a0<em>wronger.<\/em><\/p>\n<h2>Rising Yields<\/h2>\n<p>Let\u2019s begin with the first canary in this story, rising yields. The yield of a bond, expressed as a rate of interest, moves oppositely to its price. The higher the price goes, the\u00a0<em>lower<\/em>\u00a0the yield goes. The lower the price, the\u00a0<em>higher<\/em>the yield. Imagine the relationship like a playground see-saw.<\/p>\n<p>Over these past few weeks and months, we\u2019ve seen yields moving up quite a lot across a wide variety of bonds, at least in terms of the percentage size of the move (yes, the yields are still historically low by any measure).<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Credit Market Warning:\u00a0Long-awaited signs of danger are materalizing There are large signs of stress now present in the credit markets. You might not know it from today&#8217;s\u00a0multi-generationally low interest rates, but other key measures such as liquidity and volatility are flashing worrying signs. Look, we all know that this centrally planned experiment forcing financial assets [&hellip;]<\/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":[1931,88,124,3596,5869,305,431,2218,6528],"class_list":["post-9253","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bond-yield","tag-bonds","tag-central-banks","tag-chris-martenson","tag-credit-market","tag-federal-reserve","tag-interest-rates","tag-peak-prosperity","tag-yield"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9253","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=9253"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9253\/revisions"}],"predecessor-version":[{"id":9255,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9253\/revisions\/9255"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}