Bonds 04 (Jul 15 - Aug 17)

[winston]

The bond market is approaching an epic turning point

Source: Daily Crux

http://thecrux.com/the-bond-market-is-a ... ing-point/

[winston]

How to Avoid the Bond Fund Bloodshed

By Steve McDonald

If you’re holding a bond fund with more than 10% or 20% leverage, funds that hold long-maturity bonds, or packaged income products that magically pay a lot more than the bond market averages (all this information should be available online), get out now.

Owning individual bonds is much wiser and safer than owning bond funds right now. You avoid management fees, the cost of leverage and the negative effects they have on your return.

Source: The Oxford Club

http://wealthyretirement.com/why-bond-f ... ?src=email

[winston]

Chart: Bonds could fall 15% more if this gives way

Source: Daily Crux

http://thecrux.com/chart-bonds-could-fa ... gives-way/

[winston]

I'm Calling It – The Bond Market Bull Is Over

By D.R. BARTON, JR.

Money flowing out of the bond market has an attractive alternative in a stock market where traders and investors are optimistic that the regulatory environment and other factors will be pro-business. Remember, money goes where it's treated best.

If there were no perceived economic gain for leaving bonds, the money would just trickle out.

But the stock market looks positively irresistible by comparison, so it's the new home of $8.2 billion that were in bonds just about a week ago.

Source: Money Morning

http://moneymorning.com/2016/11/20/im-c ... l-is-over/

[winston]

Bonds (10 year): 2.34% versus 2.297%.

Bonds continue to sell off here and around the world.

China, Saudi Arabia selling US Treasuries for their own economic struggle reasons, while Japan is buying its own bonds and US bonds, for its own economic struggles.

Source: investment House

[winston]

How Bad Could Bond Market Losses Get?

by Ben Carlson's Tumblr

Inflation and rates would likely move up together and for the same reasons, but unless we see a huge, short-term shift up in rates I’m guessing we won’t see any 2008-sized losses in high quality bonds.

If rates do rise, high duration, low credit quality and long maturity bonds will get dinged the most.

Source: Yahoo Finance

http://finance.yahoo.com/news/how-bad-c ... 50488.html

[winston]

An aversion to owning long-dated U.S. government bonds grew after U.S. Treasury nominee Steven Mnuchin told CNBC television: "We'll look at potentially extending maturity of the debt because eventually we're going to have higher interest rates."

U.S. 10-year Treasury note yield <US10YT=RR> rose 9 basis points to 2.39 percent, a tad below last week's 2.42 percent that was the highest since July 2015.

The German 10-year Bund yield was 4 basis points higher at 0.26 percent, while the Japanese 10-year yield edged up 1 basis point at 0.03 percent. <DE10YT=RR> <JP10YT=RR>

Bonds across the world lost about $2 trillion in market value since the Nov. 8 U.S. election before they recovered a bit this week, according to Bank of America Merrill Lynch <.MERGBMI> data.

Rising U.S. yields and upbeat domestic data pushed the dollar index <.DXY> up 0.59 percent at 101.53, which was short of the near 14-year high of 102.05 set last week. It was up about 3 percent for a second month in November.

Source: Reuters

[winston]

Sell all your bonds

Source: Daily Crux

http://thecrux.com/doug-casey-sell-all-your-bonds/

[winston]

Will China’s Bond Market Go Burst Soon?

By Shuli Ren

China’s bond market has seen a bull run since 2013, almost doubling the market size to 44.8 trillion yuan.

The 5-year Chinese government bond yield fell by 1.85 percentage points to 2.58% during that time.

But since November, China’s bond market has joined global sell-off, sparkling worries that we will see a repeat of the June 2013 cash crunch or the summer 2015 A-share stock market crash.

Chinese bond yields have been rising since we found out producers’ deflation has ended and China’s corporate sector entered a reflationary era.

Meanwhile, the government now seems to be targeting risk management and financial stability as the new economic priorities for 2017; in other words, we should no longer expect an easy money stance from the People’s Bank of China.

Private sector money that has invested in China’s bond market may also be pulling out. The PBoC said it will include banks’ off-balance sheet wealth management businesses in its so-called macro-prudential assessment risk tool starting next year.

A lot of the banks’ wealth management products have invested in the bond market, so that money is coming out. And not to mention the overall capital outflow in China, which quickened after Donald Trump‘s win.

So will we see a quick unwind? Ominously, the securities regulator is reportedly investigating the bond-related business of a local brokerage, reminiscent of the summer of 2015 days when the government accused one brokerage after another of unlawful market behavior.

Citi Research‘s Li-Gang Liu tells us not to worry:

Historical and cross-sectional contexts place the current selloff as modest in magnitude. The 5y bond yield in China has risen by roughly 50bp since end-Q3, and even the most concentrated period of the selloff was only about a two-sigma event.

Over the same period, the US 5y yield has jumped by more than 80bp, and yields across the world (Australia, Canada, UK, Korea and Mexico are examples) have all also witnessed outsized jumps.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... year-high/

[winston]

Billionaire Chinese tycoon Wu Ruilin defaults on 100 million yuan of bonds owed to retail investors

Chairman of telecom company Cosun Group, reportedly richer than Baidu CEO Robin Li, cited ‘tight cash flow’ for the default

Source: SCMP

http://www.scmp.com/business/banking-fi ... 00-million