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I'm Calling It – The Bond Market Bull Is Over

bond market

The bond market is in the middle of a "perfect storm", indicating the end of a long bull market.

That's critical for both bonds and stocks. And there are three factors that could add up to a global bond meltdown, as stocks rise.

Take a look at these charts that explain everything...

The Bond Market's Latest Turn Offers Us Double-Digit Upside


According to the Securities Industry and Financial Markets Association (SIFMA), in September 2016, an average of $722.6 billion in bonds traded every single day in the United States alone.

Nationally and globally, the bond market absolutely towers over the stock market - by nearly 35% worldwide and more than double in the United States.

Tens of millions of investors - especially retirement savers - own bonds, and conventional wisdom tells them to park between 50% and 60% of their wealth in those bonds. 

But... according to a survey by Wells Fargo and Gallup, a measly 22% of investors really understand how bonds work.

That's shocking, and I aim to do something about it. That way everyone will be able to participate in the bond market profit play I'll show you...

A Huge "Bond Bomb" Is Set to Explode – Here's What You Need to Know


There's a $400 billion bond bomb waiting for a light... and market volatility could be what sets it off.

Here's what to watch for - and how to protect your money...

Here's Why High-Yield Bonds Are Much Riskier Than Most Investors Realize

This method of measuring risk on high-yield bonds isn't just wrong - it ensures investors a bad outcome.

Find out why (and how to avoid this trap) here...

Why Investors Are Buying Negative-Yield Bonds

negative yield bonds

Negative-yield bonds are the next crazy result in a global economy turned upside-down by central banks.

Here's how these bonds work and why some investors are buying them...

This Looks Like the Setup for a Bond Bloodbath

More than $12 trillion of global debt is now in negative-yielding territory - a move directly at odds with the argument that the global economy is healthy.

The same is true of the drop in U.S. Treasury yields. Real per capita GDP has risen by a mere 1.3% annualized since 2009. Is it any wonder that yields have plunged and the Treasury curve is flattening?

While I expect the market to recognize the truth about inflation sooner or later, there is every possibility that yields will move lower before they move higher due to tepid growth and a flight to safety in the event of a sharp market sell-off (as we saw after Brexit).

Analyst Christopher Wood, I think, said it best: "[T]he fact remains that the intensifying global move into negative bond yields this year is plain scary...But what is also scary about the gathering lurch into negative that it is the sort of parabolic move or 'spike' which to technical analysts often signals the approaching end of a long trend."

A little more than a year ago, we saw a sharp reversal in German 10-year bund yields when they dropped to around 10 basis points and then spiked to around 1%, leaving traders nursing sharp losses. Post-Brexit, 10-year bunds are trading at negative yields, pushed lower by flight-to-safety buying and expectations that the European Central Bank will continue to monetize the economically moribund region's debt.

This looks like the setup for a bond bloodbath.

Unfortunately, some investors are walking right into the crossfire...

Rich or Poor, You Can’t Ignore U.S. Treasuries in Today’s Markets

U.S. Treasuries

There are a good number of investors who believe that U.S. Treasuries - notes in particular - are bad for you and even worse for your money at the moment.

Why really doesn't matter... rates might rise, deflation, a bond market bubble, there's too much debt... they're riskier than you think, goes the argument.

All of those things are, well... true. Yet, I submit U.S. Treasuries are the one investment you cannot afford to be without at the moment for three reasons.

So grab a cup of joe and let me share something with you that escapes 99% of all investors.

This High-Tech Leader Could Double Your Money by Disrupting the $40 Trillion Bond Market

double your money

Despite playing such an indispensable role in the modern economy, the bond market is woefully out of date in how it operates.

In fact, the bond market doesn't even make use of electronic exchanges. That's one reason why that $40 trillion market is ripe for disruption. And where you find disruption... you find opportunities for fast profits.

Today I'm going to introduce you to a high-tech powerhouse that's leading the bond market into the connected, digital age - and I'll show you how to double your money with it...

How to Get Aggressive and Profit from the Junk Bond Market Crash

You've just got to love the junk bond market. It's sent stocks on a nice year-end rally for us, and the profits have been sweet.

But don't fall in love with those stocks at these highs. The "help" they're getting from high-yield debt isn't going to last.

In fact, I believe the lull in the junk bond market is going to end in the first quarter of 2016. And I think the ugly sell-off will resume, and that storm is going to take stocks all the way back to their August 2015 lows - and possibly a lot lower.

A lot of people could lose big - well into the double digits - but I'm not worried at all. And when you see the perfect trade I'm about to show you, you'll be ready for the sell-off, too.

Now, this is a bold trade for sure, but it's an easy one, with limited downside risk. And even better, it will let us clean up when the carnage hits next quarter...

The Only Way Bond Yields Will "Go Up" Now

bond yields

Last week, the Fed chose to not raise interest rates. That decision will continue to render traditional bond investments unattractive, holding them to extremely low yields.

Just looking at the returns being generated by the largest bond funds shows you'll go hungry depending on bonds for income and total returns.

There is one way bond yields will go up... but it's not good. Here's what you need to know.

Bond-Buying Chaos Is Spinning Out of Control

A few weeks ago, the man formerly known as the Bond King, Bill Gross, tweeted that shorting German bunds would be the trade of the century.

I was gratified to see that he was reading my mind, as readers of my Credit Strategist newsletter already know.

As a result of a massive bond-buying program by the European Central Bank (ECB), the yields not only on German bunds but on all European debt had plunged to ridiculously low levels.

Here's what you need to know...

Why the Federal Reserve Will Move Rates

dow jones industrial average

To say that markets are confused about when the Federal Reserve is going to raise interest rates is the understatement of the year.

The confusion is understandable. While the U.S. economy no longer needs crisis-era policies like zero interest rates and quantitative easing, the rest of the world is still struggling.

While some would argue that such policies are not the answer, central banks in Europe, Japan and China are doubling down on huge bond buying programs.

The question is whether the Federal Reserve will go its own way or allow weakness abroad to govern its next move...

What Are High-Yield Stocks?

high-yield stocks

With interest rates at an all-time low, high-yield stocks have replaced bonds as the best option to provide a stream of income in a portfolio. What's more, they deliver the added perk of equity ownership for potential growth.

Here we explain what high-yield stocks are and give readers a few examples to get them started today...

Argentina Stock Market Crash Reverses After Today's Deal – for Now

Monday, a stock market crash to the tune of a 12.22% drop hit the Merval Argentina (BCBA: IAR), the most important index of the Buenos Aires Stock Exchange. The index fell to 5,847.78 by market close on Monday – 15% from its all-time high hit just six days prior.

But today, Argentina’s stock market got relief. Stocks are up 1.14% after the country’s lawyer said it will negotiate with a group of hedge funds that are suing over $1.33 billion in bonds.

The move is historic since Argentina had said it would never negotiate with the group – but, after what happened this week, they had little choice...

Money Morning Exclusive: Meredith Whitney on Muni Bonds and Red State-Blue State Migration

In 2010 Meredith Whitney made an earth shattering statement during a CBS's "60 Minutes" interview that rocked the municipal bond investment world.

"There is not a doubt in my mind that you will see a spate of municipal-bond defaults,"said Meredith Whitney on Dec 19. She continued, "You could see 50 sizable defaults, and 50 to 100 sizeable defaults, more. This will amount to hundreds of billions of dollars' worth of defaults."

The muni bond market fell far short of Whitney's prediction. But many today feel she was merely ahead of her time.

Recently Detroit has defaulted on its muni bonds leaving investors hoping to get 10% return on their original investment, but there are no guarantees.

As Detroit moves closer to bankruptcy California has 10 cities facing the same fate. The cities of Atwater, Azusa, Compton, Fresno, Hercules, Mammoth Lakes, Monrovia, Oakland, San Jose and Vernon are ready to file for bankruptcy following the now bankrupt Stockton's lead.

Money Morning's Shah Gilani recently talked to Whitney in an exclusive interview about her new book, The Fate Of The States:
The new Geography of American Prosperity

She believes that wealth and opportunity are moving away from the coasts and toward the central corridor. The states of California, Florida and Nevada benefited from the housing boom. However instead of budgeting wisely, local governments spent their windfall profits as fast as they came in on pay increases for public employees, pension increases and pay hikes.

When the housing boom ended, the money stream became just a trickle of new capital. The states were left with pensions they couldn't pay and employees they couldn't afford. They were forced to raise taxes for schools and essential public services.

In contrast a much different scenario was developing in the interior states: N. Dakota, Texas, Indiana. These states avoided the housing crisis. Because foreclosure was not a serious problem they found themselves rich in capital with money to offer tax incentives to companies to relocate and retrain new employees.

These central states are also positioned to reap the massive benefits of from the oil and natural gas boom.

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