Bond Bubble Blabber Blather……………… BDI

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Crystal ball, descending line graph and share prices. Image shot 2009. Exact date unknown.

Have you noticed that the extremely well respected bond fund managers Jeffery Gundlach & Bill Gross have been out in force all over the financial media in a concerted effort to assure us that the sharp spike in bond yields is nothing to get too concerned about?  Anytime big league fund mangers are overtly delivering sure-fire batting instructions and pitching perfectly timed advice on the markets, my antennas go up as I become suspicious of a dastardly curve ball heading directly for the plate.  Why now and why such persistent prognostic public pronouncements over the stadium’s loud speakers?

Here is BDI’s take…………… 

The real reason they are purposely attempting to convince us all that rates will ease back down and not to worry about a thing here is because they themselves are caught on the wrong side of the boat, loaded to the gills with 5-10 year U.S. debt obligations at desperately dicey levels.  Despite their calm and confident outwardly reassurances, they are actually panicking deep inside. Frantically trying to influence all bond market investors, including their own clients, not to rush for the exits all at once, which would cause massive redemptions / liquidations of their managed holdings, having a devastating effect on the value of their funds.  The Fed’s consistent and calming QE waves have left them way too complacent in the deep end of the pool, and they’re about to drown under the terrific tsunami of a dangerous debt debacle.

Do not buy into their clap trap.  Rest assured, they will be selling into every bond rally’s from here on out with urgency, in order to shorten up the duration of their massive sovereign debt portfolios as quickly as humanly possible.  Ask yourselves, have you ever seen and heard them so vociferously articulating such specific and definite advice in the public square?  They are clearly trying to influence the market, so that they themselves can get out unscathed with the least possible harm to their clients.

Interest rates are quickly going higher from here.  Brace yourselves, as it will create all kinds of carnage in the financial markets and the real economy.

Do not get sucked into their disingenuous advice, they are simply trying to save their own asses!!!