**** 10.20.22 16:10 ET UPDATE ****
The bond market continued to sell off, down to 4.228% as of this update. The sell off is intensifying and the permabulls will be all over radio and television to tell everyone it means that stocks are cheaper and this is a great time to buy, buy, buy.
Until the smart money is proven right, once again. This is a sovereign debt crisis and most of the blithering idiots have yet to recognize this disaster as it unfolds. Next stop 4.50% then 5%. Much higher than even I ever dreamed the Fed would let it go but the economic war is getting worse also.
The “experts” will dispute this, but the evidence is crystal clear. At 4:30 a.m. this morning, just ten long minutes ago, when one turns on their screens and sees the bond yields for the United States across the curve skyrocketing hire, it’s obvious.
While the moves this morning might seem minuscule, last week the idea of the 10 year above 4.10% and the 2 year above 4.6% were considered laughable. Instead the evidence that this slow moving crash is beginning to accelerate. The three month chart of the US 10 year yield demonstrates this clearly as yields have almost doubled:
This is not reflective of a stable sovereign debt market when yields almost double in less than three months.
The European bond market is worse, Japan a total shitshow, and the smoking gun should be quite obvious to anyone paying attention. There are lower and lower levels of foreign participation in US sovereign debt auctions which is an indication that the bond liquidity crisis is here and intensifying. The Fed has been buying short term US sovereign debt but in reality they may have to step in to save the market again, further destroying what little credibility the central bank has left.
Prepare for impact.