Never before has an agency of a state anywhere in the world pleasured speculators with such stupendous windfalls.
Bonds with long maturities are sitting ducks – and thus ideal.
Junk bonds in “extreme overvaluation,” covenant quality drops to record low, old money getting whacked as new money pours in.
And he offers an insanely good chart of the Hot Money.
Central banks have succeeded in generating a planet-wide mania.
I can’t even begin to think of all the unintended consequences this will bring about.
US junk goes in. Plump, yen-denominated, highly rated bonds come out.
Statistical fluke? Hardly.
Risks “more widespread” than implied by bond ratings. Bondholders and public employees beware. The Fed is doing workshops on municipal bankruptcies now.
Fed clueless how to unscramble omelet, fears “outsized market reaction.” Other central banks keep adding to omelet. Absurdity reigns.