Anyone else short 30yr bond? Trading all time highs 5/30/12
- Thread starter Uncle_Ho
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âThe End Gameâ â Global Macro Investor, May 2012
Posted on June 1, 2012
Analysis by Raoul Pal â Global Macro Investor:
âThe world has no engine of growth with most of the G20 countries approaching stall speed at the same time. The Western World is about to enter its second recession in an ongoing depressionâ¦â
âFact: This will be the lowest cyclical peak in GDP growth in G7 history. These are the weakest ever foundations on which to enter a recession.â
âThe ten largest debtor nations on earth have total debts of over 300% of World GDP.â
Pal warnings:
With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivativesâ¦
Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
And then do you think Japan and China would not be next?
And then do you think the US would survive unscathed?
That is the end of the fractional reserve banking system and of fiat money.
It is the big RESET.
Moreâ¦:
Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
The whole bond market will be dead.
Short selling on bonds â banned
Short selling stocks â banned
CDS â banned
Short futures â banned
Put options â banned
All that is left is the Dollar and Gold
Summaryâ¦:
We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses.
Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.
Raoul Pal, 22 years experience in global finance â founder of Global Macro Investors. Also previous affiliation with GLG Global Macro Fund â London and with Goldman Sachsâ hedge fund business â equities and equities derivatives.
Report accessed from Zero Hedge:
http://www.zerohedge.com/news/big-reset-2012-and-2013-will-usher-end-scariest-presentation-ever
strap your ass in.
s
Posted on June 1, 2012
Analysis by Raoul Pal â Global Macro Investor:
âThe world has no engine of growth with most of the G20 countries approaching stall speed at the same time. The Western World is about to enter its second recession in an ongoing depressionâ¦â
âFact: This will be the lowest cyclical peak in GDP growth in G7 history. These are the weakest ever foundations on which to enter a recession.â
âThe ten largest debtor nations on earth have total debts of over 300% of World GDP.â
Pal warnings:
With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivativesâ¦
Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
And then do you think Japan and China would not be next?
And then do you think the US would survive unscathed?
That is the end of the fractional reserve banking system and of fiat money.
It is the big RESET.
Moreâ¦:
Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
The whole bond market will be dead.
Short selling on bonds â banned
Short selling stocks â banned
CDS â banned
Short futures â banned
Put options â banned
All that is left is the Dollar and Gold
Summaryâ¦:
We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses.
Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.
Raoul Pal, 22 years experience in global finance â founder of Global Macro Investors. Also previous affiliation with GLG Global Macro Fund â London and with Goldman Sachsâ hedge fund business â equities and equities derivatives.
Report accessed from Zero Hedge:
http://www.zerohedge.com/news/big-reset-2012-and-2013-will-usher-end-scariest-presentation-ever
strap your ass in.
s
Have you looked at the website of this guy? There is one research piece, from July 2008 and he called everything near-perfectly. Which could mean either of two things - either he is a genius and his newsletter is a gold mine (in that case, why is he not managing his own money instead, if he can produce 100+ annualized returns) or he modified the newsletter a little post-factum. I have seen his research from May 2010 post-flash crash, he just as violently predicts the end of the world that will come in 2010.
PS. Gotta love the talking heads - cost them nothing to swing for the fences, as people forget in a week.
PPS. E.g. how did Taleb do on his short UST call? Must be really working out for him.
It's becoming fashionable to ridicule early top pickers and throw out 1% targets much like the entire CNBC fast money crew said $200 oil was a lock in 2008 about a week before it topped. Wish I had the video.
Food for thought:
I heard multiple times this weekend that bonds are being bought without regard to price/yield, just capital preservation. Why then is the long end blowing out, when you can preserve capital in 3 month bills still trading at a positive nominal yield?
I also hear "don't fight the fed" as justification for owning the long end. Well, considering 1.40% on the 10's is clearly a deflationary doomsday yield, you have to ask yourself who is fighting the fed when the chairman said he will do everything in his power to prevent a deflationary spiral.
Food for thought:
I heard multiple times this weekend that bonds are being bought without regard to price/yield, just capital preservation. Why then is the long end blowing out, when you can preserve capital in 3 month bills still trading at a positive nominal yield?
I also hear "don't fight the fed" as justification for owning the long end. Well, considering 1.40% on the 10's is clearly a deflationary doomsday yield, you have to ask yourself who is fighting the fed when the chairman said he will do everything in his power to prevent a deflationary spiral.