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Telegraph: U S Counts Cost Of Treasury Yields.

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'US counts cost of Treasury yields':

http://www.telegraph.co.uk/money/main.jhtm...4/14/cnus14.xml

Yields on 10-year US Treasuries have risen above 5pc for the first time since 2002 on heavy selling by big institutions, sending tremors through the US mortgage and corporate credit markets.

The US 10-year bond is the key instrument used to price borrowing in the American economy, with ripple effects through the global system.

Yields have risen sharply by 0.6 percentage points so far this year, reaching 5.036pc in New York last night.

The powerful upward draft has lifted German, French and other eurozone bonds in step, driving up the cost of borrowing on the capital markets.

Analysts said the spike in yields is chiefly caused by an exodus of Asian investors, who hold a huge chunk of the US national debt.

[...snip...]

Michael Taylor, senior economist at Lombard Street Research, said this year's sudden rise in 10-year yields risked tipping the US economy into a downturn.

"This could be the catalyst for a sharp correction in property prices and wean consumers off their credit binge," he said.

The cost of the average 30-year mortgage in the US has risen from 5.5pc last summer to 6.43pc this week. The housing boom is now the mainstay of the US economy. Last year Americans withdrew the equivalent of 6pc of GDP in home equity from their houses, spending most of it on daily bills, holidays and consumption.

[...snip...]

Joachim Fels, an economist at Morgan Stanley, said the conundrum had been caused by the easy money policies in Japan and Europe, creating a flood of global liquidity that continued to overrun the US credit markets long after the Fed began raising rates.

He said synchronised tightening across the world was now leading to bond sell-offs everywhere, with "nasty implications" for risky assets. "I think it is time to hunker down," he said. The bank is predicting a 7.9pc fall in European stock markets over the next six months.

Edited by Jeff Ross

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Wow - how bearish is that article - for the Telegraph as well - things must be getting serious.

Karhu et al have been discussing this for a good few days on many threads - there are still others on here that doubt what they have been saying - maybe this article will give their assertions greater credence.

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We've had a few false dawns over the past 18 months.

BEAR MARKET for the past 18 months, boyo.

BEAR MARKET.

No more EASY MONEY on BATHROOM FITTING.

No more 30K for a WOOD LAMINATE FLOOR.

No more.

No more.

BEAR MARKET.

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It now looks likely that the FED, BOJ and ECB will all raise rates in the next 6 weeks or so. Gilt yeilds will follow. Various other lesser world banks will follow suite.

What then GB?

Kiss number 10 goodbye

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BEAR MARKET for the past 18 months, boyo.

BEAR MARKET.

No more EASY MONEY on BATHROOM FITTING.

No more 30K for a WOOD LAMINATE FLOOR.

No more.

No more.

BEAR MARKET.

I'm talking about the breakout, the big push, the grandslam, the big one, D-Day, the final reckoning, etc etc

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No more BOOMs or BUSTs.

Just Bust for the foreseeable future then.

In a word or two.

Boof, Bang, Kelrplunk, Kazzam, Pop, Fizzle, Crunch, Kapow.

Joy of all joys.

It has already started and they're telling us it will continue in earnest. The speed and duration of the crash are the only relevent questions to ask?

Bye, bye bulls - hello bears.

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We've had a few false dawns over the past 18 months.

But this is fairly meaty...

We'll have to wait and see.

Richard Burton's expression on your avatar is how i imagine you looking!

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Just brought this back to the top of the list for the Saturday evening shift to read. Enjoy!

I'm enjoying :lol:

Very bearish, it has been drawn, it has taken aim, the trigger is being pulled back, very soon, shoot, crash, bang, wallop. :P

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Many who bought into the "Miracle Economy" and leveraged their souls to buy a house whether they could afford it or not are now on the knife edge. One small uptick in IR and panic will set in. That is why Gordon must be sweating right now as his hopes and dreams of power are fading with world IR hikes. His B o E can only hold out for so long. How much longer can Gordon claim that inflation is at 2% and not raise the rates?

Thankfully, IR are no longer under his control as the world is going up up and away. The Telegraph dare to print articles that do not support the Miracle Economy because we all know they are the Tory paper. But what they say is true:

Michael Taylor, senior economist at Lombard Street Research, said this year's sudden rise in 10-year yields risked tipping the US economy into a downturn.
"This could be the catalyst for a sharp correction in property prices and wean consumers off their credit binge," he said.

Its already happening in the US with foreclosure rates up everywhere and median dropping in the bubble markets.

http://www.signonsandiego.com/news/busines...b14housing.html

Clearly influencing the slowdown in price escalation is the growing inventory of homes on the market. In June 2004, when the market was at its peak, the number of homes listed for sale was 6,657, according to the San Diego Association of Realtors. Yesterday, there were 17,010 listings.
The trend is reflected in DataQuick's survey. Last month's overall sales totaled 4,146, a decline of 17 percent from March 2005. That was the lowest count for March since 1998, when 4,016 homes sold. An average March for the past 19 years has had sales of 4,029, Karevoll said.

The UK and US sinks and swims together and we both enjoyed the Great Crash of 1989-96 concurrently. Looks like the "Catastrophic Crash" of 2004-20?? will be no different.

Edited by Realistbear

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You missed out the best bit!

Analysts said the surge in bond yields may have been accelerated by panic selling of Treasuries by hedge funds and US investment banks.

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You missed out the best bit!

THe penny has dropped that the Japanese rate rises are going to ripple through the bond markets like a wildfire and carry with them a momentum the like of which has not been seen in modern times! The economic cycle has changed direction very rapidly leaving no time for interest rate senistive asset holders to get out.

:lol::lol::lol:

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I love that bit RB :rolleyes: , it should form part of your signature

A panic sell will begin at some point and it will be interesting to see if they trace it to the hedge funds. With the advent of the internet the crash will be different this time because information travels that much faster.

The next stage will be the instant forests of "For Sale" signs that will be popping up after desparate sellers say that the Spring Bounce didn't materialise and they tell their edgy neighbours.

I wonder what the VIs are planning for their next media blitz after this weekends "past records" splurges in the tabloids? :lol:

Edited by Realistbear

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  • 339 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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