Monday July 9, 2012
What is an extreme? I would say that giving a government money knowing you will get less in return is an extreme of fear. Bloomberg reports that we are there now. German two year yields are negative this morning and B. expects Franc e will be there soon.
This is why we are in the camp believing that bond prices have peaked as well as rush into the Dollar. How much more frightened can everyone get? It is extremely hard to believe that the markets will collapse 2008 style with investors paying Governments to hold their money. To my knowledge there has never been a collapse that started in such a fashion. By definition everyone has to be in the stock market for a collapse to begin.