blue: SPX
orange: SPX divided by Yield 30YUS Treasuries.
Second pan red: absolut Yield 30Y US Treasuries
Comparing SPX with the US-30YTreasuriey Yield something special on the way.
Never before we saw such a strong rising of the Yield.
More than 4% in short time and SPX did only a correction of 25%.
Naturally: Yield Curve now is descending and everyone is expecting lower yields by the FED and the market.
But at last: pure speculation.
The massive rising of the yield means falling Bond Prices.
At what we will see, is not very amazing: Lots of Banks in trouble end of year, when they have to take the market prices into the balance sheets of their Nostro Bonds.
And this will go on: Primary Dealers have to buy back their lended securitieres for nominal Prices and afterwards lower market prices. Will also bring a lot of banks in trouble, when they will make again repos
All over all:
The FED will put down their Fed funds rate very fast.
But Market will not follow for sure, because enormous risk on bank market.
At the end: For sure we will see sinking Dollar and rising inflation.
And: Last blow up in SPX, before further strong falling prices
orange: SPX divided by Yield 30YUS Treasuries.
Second pan red: absolut Yield 30Y US Treasuries
Comparing SPX with the US-30YTreasuriey Yield something special on the way.
Never before we saw such a strong rising of the Yield.
More than 4% in short time and SPX did only a correction of 25%.
Naturally: Yield Curve now is descending and everyone is expecting lower yields by the FED and the market.
But at last: pure speculation.
The massive rising of the yield means falling Bond Prices.
At what we will see, is not very amazing: Lots of Banks in trouble end of year, when they have to take the market prices into the balance sheets of their Nostro Bonds.
And this will go on: Primary Dealers have to buy back their lended securitieres for nominal Prices and afterwards lower market prices. Will also bring a lot of banks in trouble, when they will make again repos
All over all:
The FED will put down their Fed funds rate very fast.
But Market will not follow for sure, because enormous risk on bank market.
At the end: For sure we will see sinking Dollar and rising inflation.
And: Last blow up in SPX, before further strong falling prices