The Investing Legends Are Preparing For a Crash
by Phoenix Capital
ZeroHedge.com
Jun 21, 2016
Stocks exploded higher last week on hopes that the tragedy in Britain would not result in a Brexit.
The ramp job continued into Monday morning… but there it ended. Stocks erupted higher Monday morning but then gradually gave back most of their gains.
The fact of the matter is Brexit or no, the world is facing a huge amount of negative developments.
Globally over $10 trillion in bonds are trading with negative yields. This, in of itself, is the makings of a tremendous crisis. With negative yields, bondholders are forced to pay the issuer for the right to lend money.
However, the far bigger issue is the $200+ trillion in interest rate based derivatives. The big banks use sovereign bonds, such as German Bunds, as collateral to backstop the derivatives markets.
Globally over $10 trillion in bonds are trading with negative yields. This, in of itself, is the makings of a tremendous crisis. With negative yields, bondholders are forced to pay the issuer for the right to lend money.
However, the far bigger issue is the $500+ trillion in interest rate based derivatives. The big banks use sovereign bonds, such as German Bunds, as collateral to backstop the derivatives markets.
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