Stock Market Kiss of Death, Get Out the Popcorn, The Show is About to BeginSubmitted by northstar on Wed, 08/15/2012 - 18:33
Friends, you are looking at the game changer for the world markets. There are several reasons why.
The first is that this tolls the death knell for the bond carry trade that has sustained the banks for so long. In essence, they could borrow from the Fed at .25% and invest in notes and bonds at 1.8% (notes) to 2.8% (bonds) and profit from the “carry” or spread. Naturally, as notes yielded less and less, banks switched to bonds for the higher yield.
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