THE BOND YIELD SPIKES: Why they happened…and what happens next

Quantitative Easing – aka printing money combined with massive manipulation of the market – is what we see. Well put on The Slog. What would the ordoliberals have made of this chaos. See also Acting Man blog.

The Slog.

Bill Gross, trader naivety, Janet Yellen and unreliable data caused the bonds sell-off. Pimco says the worst is over. The markets remain edgy. The Slog investigates.

I spent much of yesterday postulating (a nasty habit at the best of times) about Asian sovereigns selling off bonds to create broader rate contagion and thus deflate asset bubbles. But there’s no evidence at all for it. As in, none whatsoever. I think I hugely overestimated the IQ of governments staring down the barrel of an inevitable asset crash in parts of Asia; but on reflection – having done some thinky-diggy yesterday evening – I think the IQ I mainly overestimated was that of the markets themselves. The wisdom of crowds was always, after all, meant to be ironic bordering on sarcastic. You could call it ironcastic in fact, but there’s nothing cast iron about any markets anywhere today.

The first thing I…

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