“This Is The Capitulation Phase” – Why Treasury Yields Are About To Really Plunge
by Tyler Durden
ZeroHedge.com
Jul 2, 2016
For the rates market, the significance of this acceptance phase by pensions cannot be understated, in our opinion. A $3 trillion industry running a $500 billion funding gap and a significant duration gap waking up to reality is likely to have major implications for the market. In the extreme case, entire pensions could be offloaded from corporate balance sheets to insurance companies (increasingly like the UK, Exhibit 1)–generating significant demand for long-end duration during such transactions.
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