Thursday, February 16, 2012

Bond market showing cracks as sell orders escalating around the world

Contrary to the way the talking heads on CNBC and Bloomberg try to spin the stock market as the barometer of the economy, the fact remains that it is the bond market that removes all doubt.

And that market appears to be escalating towards fatal as bondholders in both the US, and around the world are selling off sovereign and corporate debt at an increasing rate.

It is only appropriate that in the days after Valentine's day, the theme of dumping is revisited. Specifically that of securities. As was pointed out yesterday following the latest TIC data, there was a lot of dumping of US Treasurys by foreign official authorities, with both China and Russia (but not only) proceeding to sell a demonstrative amount of US paper.
And in a stunning display of reciprocity, US residents, not content with selling of US stocks as retail outflows soared in December, also proceeded to dump the rest of the world en mass, as the net sale of foreign securities by US Residents soared to an all time high. US Residents "sold $38.9 billion of [foreign securities] on a net basis in December. - Zerohedge


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