Today's WSJ has a great op-ed about the consequences of a bond crash.
The conclusion is that even Freddie and Fanny could go down.
And, that major systemic risk is in play.
MR G SHOULD BE JAWBONEING THE BOND MARKET UP, NOT DOWN!
THE RESULTS OF FURTHER BOND MARKET DETERIORATION CAN NOT BE PREDICTED.
BUT ONCE THE MARKET STARTS TO COLLAPSE THE END WILL BE NEAR FOR
STOCKS AND BONDS!
THAT IS THE STAGFLATION SCENARIO THAT FEW PEOPLE HAVE EVEN
CONSIDERED, BUT THAT I FEEL IS VERY VERY PROBABLE.
Indeed the very scenrario that was my first posting to this board many years ago! It is axiomatic that when trouble comes to Wall Street it comes in the bond market first.
