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Banker warns of '94-style bond crash
Topic Started: 12 Sep 2014, 09:49 AM (830 Views)
Black Panther
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Banker warns of '94-style bond crash

One of Australia’s most respected bankers has warned of a 1994-style bond crash as central banks inflate asset bubbles around the world.

Rob Whitfield, the chief executive of Westpac’s institutional bank, told an audience in China that aggressive monetary stimulus was encouraging a dangerous hunt for yield, the Australian Financial Review reports.

“I predict a future market correction; perhaps even a meaningful one,” Mr Whitfield warned, according to the newspaper.

“Credit spreads are narrow, forcing a move by many into higher risk assets; junk bond yields are at all-time lows. Asset bubbles are emerging – US share markets have posted successive record highs in recent times despite tapering and mixed economic results.

“It is my view that the current ­environment is ripe for a market ­correction that both looks and feels like what we experienced in 1994.”

In 1994, yields on US Treasury bonds soared around 200 basis points after the Federal Reserve started lifting following a period of loose monetary policy.

http://www.dailytelegraph.com.au/business/breaking-news/banker-warns-of-94-style-bond-crash/story-fnn9c0gv-1227055994118?nk=e930bee5e051513d4a46f6eb774c9777
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newjez
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http://blogs.wsj.com/source/2010/12/29/remembering-1994/

http://www.cnbc.com/id/100478351
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Ex BP Golly
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WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Black Panther
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Well, do remember.

I predicted that the Zionist controlled Anglosphere would start a major war
rather than just accept taking a hair cut and losing its Premier spot on the Geo political pecking order.

A likely Bond market crash would make the decision to press the button much more likely.
Edited by Black Panther, 12 Sep 2014, 10:15 AM.
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peter fraser
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Black Panther
12 Sep 2014, 10:14 AM
Well, do remember.

I predicted that the Zionist controlled Anglosphere would start a major war
rather than just accept taking a hair cut and losing its Premier spot on the Geo political pecking order.

A likely Bond market crash would make the decision to press the button much more likely.
Were you a Money Morning Refugee?
Any expressed market opinion is my own and is not to be taken as financial advice
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ThePauk
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A US currency crash may signal a bond burst perhaps?
Seems to me the current global currency war is not going to end well at all.
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miw
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ThePauk
12 Sep 2014, 12:31 PM
A US currency crash may signal a bond burst perhaps?
Seems to me the current global currency war is not going to end well at all.
I'd say the opposite. US currency strength will be associated with a bond crash.

Just recently we have been getting a bit of a taste. At these levels, 25 basis points on yield is about 5% on the 30-year.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Foxy
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Zero is coming...

Black Panther
12 Sep 2014, 09:49 AM
Banker warns of '94-style bond crash

One of Australia’s most respected bankers has warned of a 1994-style bond crash as central banks inflate asset bubbles around the world.

Rob Whitfield, the chief executive of Westpac’s institutional bank, told an audience in China that aggressive monetary stimulus was encouraging a dangerous hunt for yield, the Australian Financial Review reports.

“I predict a future market correction; perhaps even a meaningful one,” Mr Whitfield warned, according to the newspaper.

“Credit spreads are narrow, forcing a move by many into higher risk assets; junk bond yields are at all-time lows. Asset bubbles are emerging – US share markets have posted successive record highs in recent times despite tapering and mixed economic results.

“It is my view that the current ­environment is ripe for a market ­correction that both looks and feels like what we experienced in 1994.”

In 1994, yields on US Treasury bonds soared around 200 basis points after the Federal Reserve started lifting following a period of loose monetary policy.

http://www.dailytelegraph.com.au/business/breaking-news/banker-warns-of-94-style-bond-crash/story-fnn9c0gv-1227055994118?nk=e930bee5e051513d4a46f6eb774c9777
We need to attempt to work out what it means, not just say because we do not understand it it is bad.
I know one thing, a person can buy a new home in Western Australia for $320,000 at a cost of about $350 per week, now if anyone thinks that is expensive i want you to find a very thick concert pillar and run as fast as you can and hit your head on it, when you wake up ask yourself again is $350 per week expensive to have a roof over your head. If the answer is yes repeat head treatment.
Peter
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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goldbug
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That is cheap peter. Over what period would that loan be anyway? Or is that an IO loan?
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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miw
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Mustapha Mond
13 Sep 2014, 11:25 AM
We need to attempt to work out what it means, not just say because we do not understand it it is bad.
I know one thing, a person can buy a new home in Western Australia for $320,000 at a cost of about $350 per week, now if anyone thinks that is expensive i want you to find a very thick concert pillar and run as fast as you can and hit your head on it, when you wake up ask yourself again is $350 per week expensive to have a roof over your head. If the answer is yes repeat head treatment.
Peter
How would that $350 compare with the rent on an identical dwelling next door?
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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