Welcome To Japanification, Where Yields See No Floor
Authored by Bloomberg macro strategist, Laura Cooper
Welcome to the new global era of Japanification, where bond yields will struggle to find a floor as the policy race to zero and beyond propels advanced economies toward tepid inflation and stagnant growth.
Policy makers are unleashing their limited arsenal to cushion the coronavirus shock. Wednesday’s aggressive rate cut from the Bank of England followed the Federal Reserve and others, and hopes are high for the European Central Bank to surprise on Thursday after Christine Lagarde warned of a 2008-like hit to growth.
Negative rates are fast becoming the norm. This week, negative-yielding debt jumped to nearly $15 trillion…
… the short- end of the U.K. curve briefly hit sub-zero for the first time and the entire U.S. curve fell under 1%.
All before the full and still unknown effects of the virus shock have fed through to economic data.
Yet emergency cuts alone accelerate the structural shift to monetary policy impotence. Officials across advanced economies deployed coordinated conventional easing from late 2007 through mid-2009. This included the Fed and the BOE who each cut about 500bps, the BOC at 425bps and the ECB at 375bps.
Prior to the Lehman collapse, major developed central banks altogether had about 4,150bps of room above zero in conventional rate cuts. It was just above 600bps on March 2, and this has been reduced by 175bps since.
Yet markets continue to bank on cuts – pricing suggests advanced economies will all approach the zero lower bound over the coming 12 months, with five extending deeper into negative.
One could argue the proximity to the zero lower bound in the U.S. and U.K. warrants aggressive policy action to front-run stimulus for more of an impact.
But cheaper money on its own is unlikely to boost demand amid uncertainty and would leave central banks with less future fire power should the global economy tip into recession. It’s clear investors want to see coordinated and targeted stimulus measures that go beyond rate cuts, judging by their contrasting reactions to the Fed and BOE moves.
The trap of disinflationary pressures and stagnant growth is also diminishing central banks’ capacity to lift confidence, let alone market-implied inflation expectations, which are plumbing near record lows in the U.S and Europe. Exhausting the tools of rate cuts and quantitative easing have yet to spur price pressures.
Investors have pinned their hopes on fiscal stimulus, which have so far fallen short of market expectations given a piecemeal approach. The lack of productivity-enhancing measures and a grinding demographic shift are further aggravating the pernicious environment of subdued inflation and low rates.
Beyond the fanfare of emergency cuts, the possibility of the zero lower bound becoming the upper bound got a boost this week. What was previously a floor for bond yields now looks like a trapdoor.
Amazon Is Reported Buying NYC’s Lord & Taylor Building, Buying Out WeWork
Having shunned New York over the HQ2 debacle, it appears Amazon has decided that its NYC headquarters will be a little closer to the heart of retail.
The New York Post is reporting, citing unidentified people familiar, that Bezos and his pals are forking over $1.15b in cash to buy the former Lord & Taylor flagship in Midtown Manhattan.
The building will reportedly serve as Amazon’s NYC headquarters, housing some 4,000 employees who will move into the new office about 18 months, one of the person said
The largest cost associated with the deal consists of Amazon paying off $750m in construction loans taken out for WeWork’s renovation of the space, and the remainder consists of more than $350m in equity for the building’s current owners.
The New York Post notes that, according to the same people familiar with the matter, that WeWork has waived any economic interest in the building in exchange for getting out of the lease, and co-founder Adam Neumann won’t make any money on the deal
What will AOC say?
Incidentally, this news hits right as Amazon tells all its employees to work from home through through March if they are able, CNBC reported, citing a statement from the company.
“We are now recommending that all of our employees globally who are able to work from home do so through the end of March,” a spokesperson said.
So maybe the Lord & Taylor Building can be redesigned as a major quarantine center?
Trump Authorizes Military Response After Deadly ‘Iran-Backed’ Attack
Wednesday’s rocket attacks on Camp Taji, which lies just north of Baghdad, claimed the lives of one British and two American soldiers — and to be expected top US defense officials are nowpointing the finger at Iran.
As if the Mideast region and the world for that matter needs another crisis to worry about, the Pentagon is talking military retaliation. US Defense Secretary Mark Esper said Thursday that President Trump has issued the authority to potentially “do what we need to do.”
“We’re going to take this one step at a time, but we’ve got to hold the perpetrators accountable,” Esper said. “You don’t get to shoot at our bases and kill and wound Americans and get away with it.”
Camp Taji file, Getty Images.
And separately Gen. Kenneth McKenzie told a Senate hearing Thursday morning: “The Iranian proxy group Kata’eb Hezbollah is the only group known to have previously conducted an indirect fire attack of this scale against U.S. and coalition forces in Iraq.” The major attack had utilized at least 15 Soviet-era rocket artillery and further left a dozen wounded.
The top general said the Iran-backed militias were to blame and that the US can identify the culprit with a “high degree of certainty”.
Later in the day Defense Secretary Mark Esper told reporters at the Pentagon: “I have spoken with the president. He’s given me the authority to do what we need to do, consistent with his guidance. And, you know — if that becomes the case,” according to Reuters.
However, it’s as yet unclear what this will entail, especially at a moment there’s multiple coronavirus-related crises right here at home.
Esper said when pressed by reporters that he was not going to telegraph any U.S. response: “I’m not going to take any option off the table right now, but we are focused on the group — groups — that we believe perpetrated this in Iraq, as the immediate (focus).”
It must be remembered that it was Pentagon ‘retaliation’ strikes on Khataib Hezbollah in the first place which led to deadly tit-for-tat strikes that paved the way for the US killing by drone of IRGC Quds Force chief Qassem Soleimani on January 3rd, elevating the US and Iran essentially to a state of war.
Back in 2016, the government was exposed as secretly stockpiling supplies to help them survive a pandemic. These supplies aren’t for saving us, but for saving them. Somewhere, there is a sprawling system of government storage facilities so secret that the American people can’t be told where they are, or what is kept in them.
But it is clear they were (and still are) gearing up for something. These secret facilities are apparently in place to support the logistics of a response to an unprecedented disaster the likes of which no one has ever seen, or perhaps even conceived of in this country.
One thing is certain: the federal government has what is surely the largest stockpile of emergency equipment and medical supplies that has ever been assembled.
NPR did an exposé on the fascinating secret stockpile you likely never knew about:
When Greg Burel tells people he’s in charge of some secret government warehouses, he often gets asked if they’re like the one at the endof Raiders of the Lost Ark… “Well, no, not really,” says Burel, director of a program called the Strategic National Stockpile at the Centers for Disease Control and Prevention.
Thousands of lives might someday depend on this stockpile, which holds all kinds of medical supplies that the officials would need in the wake of a terrorist attack with a chemical, biological or nuclear weapon.
The location of these warehouses is secret. How many there are is secret. (Although a former government official recently said at a public meeting that there are six.) And exactly what’s in them is secret.
…
“We have the capability, if something bad happens, that we can intervene in a positive way, but then we don’t ever want to have to do that. So it’s kind of a strange place,” says Burel. “But we would be foolish not to prepare for those events that we could predict might happen.”
…
The inventory includes millions of doses of vaccines against bioterrorism agents like smallpox, antivirals in case of a deadly flu pandemic, medicines used to treat radiation sickness and burns, chemical agent antidotes, wound care supplies, IV fluids and antibiotics.
…
The results can’t be discussed publicly, says Casagrande, but “one thing we can say is that across the variety of threats that we examined, the Strategic National Stockpile has the adequate amount of materials in it and by and large the right type of thing.”
The federal government is pouring more than half a billion-dollar per year into this massive and unprecedented emergency stockpile system and has built up a considerable arsenal of medicines and countermeasures since the system was established in 1999.
So, if this is the case, why would the surgeon general demand the American public NOT use or even buy face masks to protect themselves against the coronavirus? Especially considering that he claims healthcare professionals need those masks to prevent infection. Don’t they have a stockpile?
It definitely appears that this stockpile is for those wealthy elitists who control and manipulate the economy through the government. That’s why it’s a secret and that’s why you can only depend on yourself when it comes to preparedness.
While the size of the decline overall is not as bad as during the great financial crisis, the velocity of the moves are unprecedented.
The last four days have seen the equal-weight S&P crash 18% – that is faster than at any time during the Lehman crisis…
Source: Bloomberg
And while VIX closed at its highest since Oct 2008, the velocity of this move – a 33 vol spike in 4 days – is unprecedented…
Source: Bloomberg
And finally, HY credit spreads (HY CDX) has exploded in the last 4 days, jumping 170bps – the biggest jump since Lehman (and the biggest percentage spread decompression ever)…
Source: Bloomberg
So – even with $4 trillion of cumulative liquidity from The Fed, this is “worse than Lehman!”
One rule every preparedness expert should go by is to always be concerned when establishment authorities, the media and “shoe shine boys” start volunteering their “expert” opinions on why you should not be concerned about a particular danger. The establishment most likely has an agenda to keep you passive, and the shoe shine boys are simply regurgitating what they hear from the media like good little robots. These people are far too interested in whether or not you are preparing for a threat; in fact they seem hell bent on talking you out of preparation in general. Why is that?
In the past two months I have seen an endless flow of mainstream news stories arguing first, that Covid 19 is nothing to worry, and second, that the public is “in a panic” over the virus.
The first assertion is obviously ridiculous. With an official death rate of around 6% in Italy alone, I think we are starting to see what the Chinese government has been trying to hide as they continue to threaten their citizens with punishment for leaking “fake news” (FACTS) on the coronavirus. This event is not something to be taken lightly; it is a paradigm shifting scenario which will change the world forever.
The second assertion seems to be a calculated exaggeration; a form of reverse psychology. Keep telling people they are “panicking” when they are not and maybe they will go to the other extreme and passively do nothing at all just to avoid the label. I have to say, I don’t think people in this day and age know what a mass “panic” actually is, especially if their only point of reference is some empty toilet paper shelves at Costco.
In terms of the stock markets one could say a “panic” has FINALLY ensued as trillions in capital are being wiped out daily, but this does not affect the average person financially in the short term. The stock market matters only in that it is a psychological placebo which keeps people from looking into the deeper problems within the fundamentals of the economy. They see the stock market is doing well, they don’t bother to investigate anything else.
Now that stocks are crashing perhaps the public will look into other more important factors,including historic levels of corporate and consumer debt, the global dollar liquidity shortage and the Fed’s repo crisis, the global plunge in exports and manufacturing, the retail Apocalypse in the US, collapsing Treasury yields, collapsing oil prices, etc.Most of these are problems that existed long before the coronavirus, but maybe now people will start paying attention to them.
These problems will still be lost on the shoe-shine boys, who will continue to call you a “chicken little” for merely taking practical precautions in case of disaster.
A friend of mine was talking with some people at a local gas station about getting prepared just in case supply lines break down during the pandemic. A highway patrolman overheard him and decided to butt into the conversation, smugly telling everyone this is “just another Y2K” and it only kills people over the age of 80. My friend related to me that he tried to present a rational case for why his concerns go beyond just the virus…but the dumb cop just grinned and ignored him.
I had an interesting encounter a few weeks ago myself, when I was surprised to find a box of N95 masks at a hardware store. I went to purchase them to add to my supply and a cashier in a little vest decided to regale me with a long list of reasons why the coronavirus is “no worse than the flu” and there’s nothing to worry about. None of his information was correct, but it’s not really my job to save every all-knowing cashier I come across, so I just told him “I guess we’ll find out in a couple of months…but it’s better to be found prepared than it is to be found stupid.” The box of masks I purchased for $14 is now selling for $100, if you can even find them.
JFK Sr. related a story about how he knew the stock market crash of 1929 was coming when a shoe-shine boy started offering him unsolicited investment tips on the “best stocks” to purchase. He pulled his money out immediately and markets crashed days later. This is what I mean by “shoe shine boys” – These people are a litmus test or warning signal for smarter observers. They represent a focal point of blind optimism and arrogance within our society. They are one of the best contrarian indicators of what you should be doing in the face of a crisis.
The highway patrolman and the hardware store cashier are the same people that will be raging a month from now about how they can’t find anything they want at the grocery store and how they can barely leave the house because of the pandemic spread. They are the same people that will be demanding handouts from others two months from now when the supply chain has completely broken down. All they had to do was stock extra supplies of goods they normally use anyway, but they are more interested in being the “smartest guys in the room”.
This past week, government welfare leach Elon Musk decided to do some pandering for his globalist masters with a Tweet about how “coronavirus panic is dumb”. The special guest attendee of the World Government Summit knows full well what all this is about. It is the job of gatekeepers like him to try to convince the public to be as inactive as possible in the face of a legitimate threat. It’s not only about the virus, which Musk has no understanding of whatsoever; it’s also about the economic collapse that is occurring in the background of the pandemic.
How much do you want to bet that Musk has a grand emergency bunker of his own in case the worst happens? Most of his elitist buddies have them. But you trying to prepare? You’re dumb and panicky…
What we are witnessing is not panic, it is preparedness, and on a relatively subdued scale at that. People stockpiling essentials for emergency situations is something that should be an American mainstay – a way of life. Already the phrase “hoarders” is being used in the media to label such people, so you can see where this is all headed.
When REAL panic ensues you will know it. When the public can’t find an open grocery store, then you will see panic. When there are checkpoints in and out of major metropolitan areas stopping people from leaving if they have any symptoms of illness, then you will see panic. When Covid-19 continues to circulate through the population for a year or more and does not disappear during the summer months as some people theorize, get ready for anger and panic. When your local banks announce a financial “holiday” for an unspecified amount of time because of a credit crisis and lack of liquidity, and all the ATMs are shut down, then you will see panic. When crime rates explode because of lack of supplies and people start fighting over access to the meager food lines at FEMA camps, THAT will be panic.
And don’t think for a second that this is not possible in this country, because it absolutely is. All it takes is for the global supply chain to break down for one month and there will be chaos like nothing the average person has seen in their lives.
Examples are already starting to materialize.
A reader of mine with inside information on Walmart corporate office decisions has recently told me that individual Walmart stores will no longer be able to order stock from warehouses (distribution centers); they will still be sent trucks randomly, and those trucks will only carry what the warehouses happen to have on hand at the time. In other words, Walmart stores will soon have huge holes in their inventories due to the supply chain breakdown.
This might be limited only to Walmart, but I suspect not. The supply chain crisis will probably develop slowly relative to the pandemic situation, in the span of a couple of months, but there are certain items that will disappear rather quickly. For example, there is a legitimate threat of a drought in medicines and pharmaceuticals in the US as Chinese manufacturing has not come back on line. There are also concerns that China may “weaponize” US dependence on their medical manufacturing and deliberately withhold shipments. I would stock any essential medications and over the counter drugs you might need now.
If you want to see real panic, just wait until the nearly 50% of Americans on at least one medication can no longer get their prescriptions filled. Wait until people who are physically dependent on their supply of insulin or heart medication can’t get any. This is not a joke. It is not something to sneer at or look down our noses at.
My purpose here is not to frighten readers, but to put things in perspective and prepare you for what is coming. Lack of toilet paper in Costco is a minor inconvenience. Empty grocery stores and unfulfilled prescriptions is a nightmare.
The way to deal with this is simple – Prepare Now. Don’t listen to frauds like Elon Musk or the mainstream media when they accuse you of being a “hoarder” just for stocking supplies you would have normally purchased and used anyway over a longer period of time. There are only two reasons to discourage the public from prepping for a disaster:
1) Because the establishment is packed with idiots that do not like people breaking with the status quo and they want to maintain the illusion that all is well even at the expense of human lives.
2) Because the establishment wants to keep the masses as unprepared as possible so that as the disaster accelerates they will be unprepared and desperate, and thus easier to control with promises of government “aid” when the time comes.
Take your pick. I’m not sure which one is worse, but given the evidence of past elitist engineered crisis I’m going to say #2 is the true reason behind all of this. As I predicted in my article ‘The Psychological Warfare Of Economic Collapse’, published in 2018:
“Forcing the public to embrace worldwide centralization would require several measures. First, the current system, which as stated is designed to fail, would have to be allowed to crash. Second, the crash would have to be blamed on someone other than the globalists and their ideology of globalism. Third, philosophical opponents of globalism (i.e., conservatives, nationalists and decentralization activists) would have to be demonized or eliminated so that the globalists can build their new world order without opposition. Fourth, the population would need to be sufficiently traumatized to the point of psychological submission and desperation, so that when the new system is introduced, they will be grateful for it, thus preventing future rebellion by making the public a willing cooperator in their own enslavement…”
And, as I noted in my article ‘Globalists Only Need One More Major Event To Finish Sabotaging The Economy’, the Everything Bubble has been so precariously inflated that any freeze in liquidity will bring it tumbling down. That event has now happened and we are witnessing the implosion of the bubble in real time.
The goal here is to conjure maximum chaos. This is why the mainstream media, the White House, the CDC and the WHO have all been consistently downplaying the pandemic threat until the past week. This is why they are now trying to “shame” people who go out and prepare by accusing them of “panic” and calling them “hoarders”. This is about keeping the public in check and immobile until the REAL panic happens, and by then it will be too late for them.
I want to commend the people who stuck with me and the message of preparedness for the past several years despite the ever present “skeptics” and naysayers. We were right, they were wrong. A collapse on a national or international level was not a “paranoid” fear – it was happening in stages under the surface, and all of you were smart enough to see it coming. But now comes the hard part; how to respond?
Be sure to surround yourself with other prepared people of like mind. Be sure you are not surrounded by the shoe-shine boys who will claim they are entitled to what you have. Don’t support martial law and the subjugation of constitutional liberties no matter what rationale the establishment gives. They were the people that dismissed the pandemic threat for at least two months, they are not to be trusted now. Finally, understand that survival is a means to an end, it is not the only goal. The job of maintaining the principles of freedom for future generations falls on our shoulders now. This is far more important than mere survival.
For now, just make sure you have your preps squared away. My rule is, always plan for the worst case scenario. This is why I am not personally “panicked” by the Covid 19 crisis. This is why many people I know are not particularly panicked. One does not panic when one is prepared.
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“The fact that Treasuries, munis, and gold are getting hit tells me that everything is for sale right now. One giant margin call where even the safe-havens aren’t safe anymore. Except for cash.”
…appears to be continuing with bonds and stocks both getting dumped as the funds are delevered.
Source: Bloomberg
And the bond-stock correlation has collapsed…
Source: Bloomberg
The S&P remains above the Dec 2018 lows for now, buit blew through the 200-week average that been notable support…
Source: Bloomberg
Europe was a bloodbath:
STOXX EUROPE 600 EXTENDS DROP, WORST DAILY LOSS EVER
STOXX 600 BANKS INDEX AT RECORD LOW
FTSE 100 INDEX DROPS AS MUCH AS 11%, MOST SINCE 1987 CRASH
FTSE 100 HITS 12-YEAR LOWS
Source: Bloomberg
Virus-related stocks crashed… again…
Source: Bloomberg
Banks were blitzed…
Source: Bloomberg
VIX exploded higher – to its highest close since Oct 22, 2008…but this time the velocity is far faster
The VIX term structure is almost as inverted as it was at the peak of the Lehman crisis…
HY Credit was hammered…
Source: Bloomberg
HY Energy credit markets are getting destroyed…
Source: Bloomberg
Investment grade credit is also really ugly – not just the level but the velocity is unprecedented…
Source: Bloomberg
The chaos in Treasury markets – which The Fed hoped to fix with its $4 trillion bazooka – remain as liquidity evaporated again and yields soared into the close, despite equity ugliness…
Source: Bloomberg
A mixed picture across the term structure today with the short-end bid and the long-end dumped (3Y -6bps, 30Y +8bbps)…
And once again, yields were puked higher after the 1430 margin call…
Source: Bloomberg
The dollar accelerated higher again today as everything else was sold to grab cash (but did drop on The Fed’s actions)…
Source: Bloomberg
Crypto was clubbed like a baby seal across the board…
Source: Bloomberg
Bitcoin puked to below $6000 intraday, blowing through all it skey technicals…
Source: Bloomberg
Commodities were all smashed today…
Source: Bloomberg
WTI was hit hard today, plunging over 5% and trading as low as $30.02 intraday…
Gold was smashed lower today on massive volume as it seems the “liquidate eveything” plan is in play…
Finally, it is notable that this is the first systemic crisis since the European collapse…
Source: Bloomberg
And in case you thought the ‘fortress balance sheet’ banks were going to save the world… the world’s most systemically important banks crashed to record lows today…
Source: Bloomberg
The market is demanding almost 100bps of rate-cuts by The Fed by next week…
Source: Bloomberg
The deer are back!
And if none of that worries you – this might. USA’s sovereign credit risk is rising notably…
Biden Takes Trump In November According To Oddsmaker PredictIt
Since becoming the de-facto Democratic nominee in the 2020 presidential race, Joe Biden has staged a massive comeback and is now, for the first time, predicted to beat President Trump according to online oddsmaker PredictIt.
Notably, Trump has fallen by 5c vs. Biden’s gain of 1c, most likely due to the economic impact of the coronavirus which is in the process of quickly derailing gains made over the last three years.
Here are the odds of a Democrat beating a Republican in general, which began to rise precipitously as Biden gained ground against Vermont Senator Bernie Sanders – currently standing with the most delegates in a virtually unassailable lead.
Biden’s handlers have been attempting to capitalize on the coronavirus response, campaigning against the Trump administration’s reaction with a plan for a “decisive public health response to curb the spread” of COVID-19, and a “decisive economic response that delivers real relief.”
Today, I’m releasing my plan to combat the coronavirus. We need:
– A decisive public health response to curb the spread of this disease and provide treatment to those in need
– A decisive economic response that delivers real relief https://t.co/xjxsDn2qCD
— Joe Biden (Text Join to 30330) (@JoeBiden) March 12, 2020
Meanwhile, lawmakers have already begun jousting over a policy response to the coronavirus outbreak – with Republicans and Trump categorically rejecting a Thursday bill by House Democrats even before it was voted on for having too many ‘goodies’ included. GOP leaders, meanwhile, have canceled recess in order to formulate their own plan.
Meanwhile, the virus has a doubling rate of approximately four days. They better get their act together quickly.
Stocks rallied on ‘Turnaround Tuesday’ on the promise of government stimulus. The dollar and the bond market also turned around [ZH: but a lack of clarity since has seen stocks fade but bond yields remain higher].
In his podcast, Peter Schiff said the bond market was the one to watch because it’s possible that the promise of more stimulus could have finally pricked the overblown bond bubble.
President Trump floated the idea of a payroll tax cut. There is also talk of bailouts for oil companies and other industries hit hard by the coronavirus, such as airlines and cruise companies.
Of course, as Peter pointed out, the promise of government fiscal stimulus comes with more monetary stimulus.
Because how else is the fiscal stimulus paid for? It’s paid for by the Fed. The Fed ends up doing more QE to buy all the bonds that have to be sold to finance the stimulus.”
If Trump were to push through a payroll tax holiday through the end of the year, it would amount to about $300 billion. That is an enormous amount of fiscal stimulus in a very short period of time.
This raises an interesting question: if the US economy is really in such amazing shape, as Trump and others in his administration have claimed, why do we need a massive stimulus program?
Peter said he thinks the stimulus is really aimed more at the stock market because the administration is tired of waiting for the Federal Reserve to come through with even deeper interest rate cuts. Trump has been badgering Jerome Powell to cut deeper for months and has even advocated for negative rates. The Trump administration knows if it comes with more fiscal stimulus, it will force the Fed to provide monetary stimulus in order to monetize the accompanying debt.
Peter said the stimulus won’t help the economy.
You don’t help the economy by running deficits, printing money. I mean, if that worked, all of these banana republics would have booming economies. They don’t.”
The real result of the stimulus will be bigger budget deficits. And don’t forget deficits are already at levels not seen since the Great Recession. That will mean more quantitative easing. The Fed will be forced to buy up Treasuries to monetize the debt and keep interest rates from pushing up.
More deficits. More money printing. That is not good for the economy.”
Expectations of stimulus caused a rally in the dollar and the bond market. Bond prices fell and yields increased, pushing back above the all-time lows we saw earlier in the week. The yield on the 10-year dropped below 0.4% at its low point. On Tuesday, it was back close to 0.8%. This is still exceptionally low, but it’s a hefty single-day increase. It was a knee-jerk reaction. People just assume stimulus will be good for the economy and good for the dollar. But Peter said the opposite is true.
This is decisively bearish for the US dollar and bullish for gold. The knee-jerk reaction is the opposite of what should actually be happening, which is typical for the markets.”
Another potentially ominous sign is a blow-off top in the bond market. We may have just seen the highs in bond prices in a bull market that is about 40 years in the making. Peter said it will be interesting to see what happens through the rest of the week. If bond prices continue to fall and yields rise, it will solidify the case that we just had a blowoff – “A climactic end to the biggest bull market turned into a mania ever.”
If this is the case and we’re about to see rising interest rates, it will be a significant problem for a country as deeply in debt as the US. And of course, a stimulus program with more deficit spending will mean more bonds flooding the market which will push prices down further and drive interest rates up even more.
Peter also said it would make sense that bonds would be peaking just as we’re about to get a big acceleration in inflation.
This fiscal stimulus and monetary stimulus are precisely the type of policy-mix that would cause this to happen.”
Peter said its too early to say for certain that the bond bubble has popped.
This has been a massive bull market and the graveyards are littered with people who have tried to call the top in the bond market, but I’ll have to say that it looks suspicious that this could be it. But we need to look at a few more days to see if we can really validate that as a blow-off top.”
[ZH: And along the lines of what Peter is discussing, we note that the sovereign credit risk of USA has risen significantly in the last few days…”]
7-Eleven Owner In New Jersey Sold Homemade Hand Sanitizer That Burned Four Children
An opportunistic business owner looking to make a buck in New Jersey has now been summonsed by New Jersey officials for endangering the welfare of children and deceptive business practices.
Manisha Bharade, who owns a 7-Eleven store in Bergen County, NJ was charged after mixing foaming sanitizer not intended for resale with water and packaging the mixture in small bottles she sold, according to the NY Post.
New Jersey Attorney General Gurbir Grewal commented: “Let me be perfectly clear: If you try to take advantage of our residents during a public health emergency, we will hold you accountable. Retailers who try to make a quick buck by exploiting others will face civil and criminal consequences.”
The burning was caused by an apparent chemical reaction from the homemade mixture and it left four young boys, including three 10 year olds and an 11 year old, burned on Monday. Police visited the 7-11 after photos of the products were posted to social media along with photos of one boy who had burns on his arm and leg.
One 10 year old victim is expected to make a full recovery after being released from the hospital, while the three others were less severely burning. 14 total bottles were sold to customers, five of which have been turned over to police. Tests are being done to determine the chemical makeup of the mixture.
Police don’t believe the owner tried to hurt anyone intentionally. In fact, she wasn’t really even price gouging either, as you’d expect, selling the bottles for $2.50 each.
One law enforcement official said: “She wasn’t trying to make a lot of money and obviously didn’t mean to hurt anybody. But she’s no chemist.”
Lieutenant John DeVoe said: “While further investigation is underway, our first priority is to make the public aware that they should not use this item if they purchased it at the River Vale 7-Eleven. As far as we know, this issue is limited to the River Vale store at this time. From the information that we received, approximately one dozen of the bottles were sold to customers today.”
He concluded: “I think that the parents need to be diligent to make sure that we’re using only products that are sanctioned and sold under a consumer product. The last thing we want to do is to start buying into panic and creating our own type of sanitizers from compounds that we don’t know what they contain. That’s when the danger occurs. That’s when the compounds and mix and have a negative reaction, which is likely what occurred in this scenario.”
ABC New York reported on the incident from the store, located in River Vale, NJ;
