Will Japanese Bond Market Collapses Be The Catalyst For The Whole Thing To Come Unglued?

Normally I’m the first one that points out to everyone that tptb can kick the can down the road a LONG time before the end game comes. However, even I think we are running out of road.
Japan really has me spooked. I’ve thought for years they could be the catalyst for the whole thing to come unglued, if they did something stupid. Well, they did, and if their bond market collapses because of it, that could pop the derivative bubble again.

As another poster noted, oil is another one to watch. In the US, gas gets too high, the economy crashes. Simple as that. We are far too dependent upon long chains of logistics for nearly everything to be able to afford high fuel prices.

But you know what, it will probably be something else that no one thinks about, or a small time player that takes down the rest. Maybe another Lehman-style collapse, maybe a country or even city default triggers the whole thing. Who knows. All I do know is all the crazy shit that has happened this year would not have been allow to be made public if we weren’t close. Either they are losing control, or they are on final approach and no longer care if the sheeple know…

The bond market is headed for a meltdown, and that collapse may bring down the governments of Japan, Europe and the United States, says Michael Pento, president of Pento Portfolio Strategies.

The U.S. government was about to collapse in 2008 until the financial system was bailed out, he tells Newsmax TV. “We took on $7 trillion of new debt and took interest rates to zero percent,” says Pento, author of “The Coming Bond Market Collapse.”


GLOBAL DEPRESSION “Trigger Mechanism”: Collapse of Japanese Govt Bonds



The junk bond market is already in crash mode


The Power of the Pattern shared that Junk Bond ETF’s were creating bearish rising wedges on 5/24, suggesting a two-thirds chance junk bonds would fall in price. (see post here)

The above 2-pack reflects a breakdown in price and a breakout in yields for a Junk bond ETF and a preferred Dividend ETF. Both are nearing short-term support, where a bounce is due!

The key to the bigger puzzle on junk is the inset chart, reflecting that effective yields on Junk are breaking higher (bullish for yields/bearish for price) from a bullish falling wedge and rates are still very low on a historical basis!


US Bonds In “Panic” Mode

Based on Credit-Suisse’s Panic-Euphoria model of risk appetite, US bond markets are on the verge of the short-term capitulative “Panic” mode. Each time we have reached this level of ‘selling’ in the last 6 years, Treasury yields have compressed significantly. At the same time, equity risk appetite remains bearish and US credit risk appetite has resumed its decline (but relative to Treasuries they are significantly over-sold). Not a pretty picture…

Bonds hit “Panic” levels of risk appetite…


US Regulator: Deutsche Bank ‘Horribly Undercapitalized’ 

A top U.S. banking regulator called Deutsche Bank’s capital levels horrible and said it is the worst on a list of global banks based on one measurement of leverage ratios.

Read Latest Breaking News from Newsmax.com http://www.moneynews.com/Finance-News#ixzz2WEzBjqke
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 NOMURA: Chinese Growth Could Fall Below 7% In The Second Half Of This Year

Downside risks have grown ‘significantly.’


The Markets Are Pricing In An Autumn Fed Tapering That The Economy Isn’t Ready For

The economy isn’t strong enough yet.


Deutsche Bank ‘Horribly Undercapitalized’: US Regulator


For Stocks, “Headwinds Are Clear And Seem To Be Strengthening”

If stock markets really do their best to discount earnings six months ahead of time, then it’s beginning to look a lot like Christmas.  ConvergEx’s Nick Colas’ monthly review of analysts’ revenue expectation for the Dow 30 companies finds that hopes for growth in the second half of 2013 continues to diminish.  The upcoming Q2 2013 results won’t be much to write home about either, with average top line growth versus last year of just 1.1% and (0.7% ex-financials), the lowest comps analysts have put in their models since they started posting expectations last year.


The Economy In Pictures