QUESTION: Marty, will you please issue a new bond report? Everything you laid out in the 2020 Bond Report you handed out at the 2020 WEC has been amazing. You wrote:
“The strongest target in the Yearly array is 2023 for a turning point ahead, at least
on a closing basis. It does appear we have a choppy period starting 2021 until
2023 with each target producing the opposite direction for that 3-year period.”
Your 2023 target has been the low, with a Panic Cycle in 2028, and in Moody’s AAA Corporate, you had a Panic Cycle in 2026. Nobody can do long-term like Socrates and actually be correct. I show that chart on the Dax from 1999, projecting the Panic Cycle for 2008 to everyone on the board. I know you are swamped. But now is when we need you. You even projected that the government would bypass the banks and sell debt directly.
RB
REPLY: I will try. I am only one person. That’s what Socrates is for. The problem with being the largest international advisory firm, is that someone is always awake. To do an authoritative report on this subject means I must address it is the major currencies as well. When you plot the bonds in yen, they are not making new recent lows. This is far more complicated for as war rages globally, rates will rise but capital will flee to the USA as it has been doing of late from the Middle East, Europe, and Asia.
The selloff in global bonds is driving up borrowing costs across the board. There is no end in sight before 2028. Bond yields are at 19-year highs, and investors are blaming Trump’s quagmire with the continuing U.S.-Iran conflict. Of course, they assume this will stoke inflation worries. Others are pointing to the flood of tech-company bonds seeking cash. Then there is fear about the lack of clarity from a new Federal Reserve chairman.
All of this sounds logical, but the overlooked 800 pound gorilla is Ukraine pledging Moscow will fall, and the Neocons swearing Russia will invade Europe in a matter of weeks, why would anyone in their right mind buy government debt? With war, there is the risk of an outright default as we saw after World War I and II.
I understand this is a critical issue. I refer you to Socrates for now. I will get to it as soon as possible.
