05-12-26 savo
The US bond market crisis is intensifying.
While everyone is focused on AI and the Iran War, the US bond market is in a complete meltdown.
The 30Y Yield is now above 5.00% and the 10Y Yield is nearing the pivotal 4.50% level, which resulted in President Trump's "90-day tariff pause" in April 2025.
Long-term yields are now ABOVE levels seen prior to Fed rate cuts in another brutal reminder that the Fed can not contain the long-end of the yield curve.
At the current pace, we will likely see US mortgage rates rise back above 7.00% this year.
The question then becomes:
How much longer can markets (or the US government) ignore the yield crisis?
And, who folds first?
https://x.com/kobeissiletter/status/2054221057167634685 |
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05-12-26 savo
spal..obviously interpretation of world events is not a science... but i would say the US was the fine architect of a world order that ended on 9/11... from then on it became the bulldozer of the world order.. endless wars ..endless deficits... endless borrowing... endless bailouts... endless QE and the number of sanctions growing like mushrooms.
I do not understand the view of China as a newcomer.. those guys have been around for thousand of years... the US is the newcomer... it lasted 200 years... however, at this pace of self destruction... I doubt it will last another 200.
A pity, because pax americana pre 9-11 was a reasonable arrangement.
Our life times are very short to judge current events, but I do not like what I see.
Take the 10000 and 3000 story we were looking at yesterday.. they are boiling us slowly... but they are boiling us.. how is it possible that we can not dispose of our money as we see fit .. in cash or in card or in bitcoins or in gold or in silver... ??? |
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05-12-26 spal
| Savo - if we assume that the US was “policing” the ex-ante world order and global commons and that “sanctions” were a more civilized replacement for “war”. Then if sanctions fall away … what is the default. This is rhetorical of course, but I mean letting everyone (like Iran) wheel out their grievances is hardy preferable. If you think that given less “restraint” they’ll all act like saints … you will surely find out. |
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05-12-26 carib
| Panas: repression of masochism is no easy task.. |
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05-12-26 panasonic
Carib, yes indeed that seems to be the most plausible outcome from midterms.
Kagan piece underestimated Chinese roll in political change inside USA, malgre moi, my view is more pessimistic :-( |
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05-12-26 savo
US inflation 3,8%.
meaning rates should by hiked ...and as they are not ... real rates are going down...
gasoline to the fire.. |
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05-12-26 carib
| Pans : Trump will almost certainly lose the house, but not sure about Senate. No impeachment coming, so government by executive order might be tried. Messy. |
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05-12-26 carib
US inflation 3,8%.
no surprise here. |
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05-12-26 panasonic
| I disagree with Kagan, I think the Chinese play points more to ensure a defeat in Nov. now that US opposition has shaped into the "Mamdani Model", center democrats are history, unable to control their own party, being the numeric majority :-(( |
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05-12-26 panasonic
"cab driver at Charles de Gaulle"
LOL
Bon voyage! |
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05-12-26 carib
Personally, I am non-violent and think differences can be settled by negotiations.
I dislike wars.
But if you are attacked, you must fight back, no question about that, and this implies you must be equipped to fight back.
If you start a war.. make sure you know the objective, and make sure you actually win.Be sure you have the brightest minds on board, not clowns.
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05-12-26 savo
spal... i think that you are right regarding the world order..but the US has changed...for the worse ....and that world order does not exist any more...it was replaced by sanctions:
The number of US OFAC sanctions designations has grown exponentially, rising from 912 in 2000 to over 18,200 today
The US has made enemies of everybody.
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05-12-26 carib
| Thanks for the Kagan article. |
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05-12-26 carib
SPAL: take the RER from CDG.
More comfortable and often faster. |
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05-12-26 spal
China’s "Logic" Failure
They think their "Green Lane" and "Transactional Alternative" with Iran makes them wise. China built its empire on the 0.1% friction of the US-led global trade grid. By encouraging the "impasse" to exhaust US prestige they have successfully destroyed the grid. China now has to negotiate (and pay for) every chokepoint. If they think they can manage the operational complexity of 20 different "Sovereign Toll Authorities" across the Malacca, Hormuz, and Suez straits, they are kidding themselves.
The "happy family" narrative was a luxury of the hegemonic era. It allowed countries to enjoy the security provided by the US while simultaneously scoring moral points by opposing it.
Now they will have to pay the toll |
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05-12-26 spal
Nuland and Kagan are not on Trump’s side - they are American Internationalists (they believe in things like a “rules based order” and “making the world safe for democracy”.
They’d be the first to want to put the knife into Trump.
But what has happened is not necessarily the exclusive collapse of “America’s role” as much as it is a collapse of “rules based global order” - China thought it could take advantage of this apparent slip in American prestige forgetting that they have more than any county in the world at stake in sustaining “law of the seas” and a global commons.
Letting any mad minor power play fast and loose with asymmetric toys is not a sustainable situation.
Thus some kind of grand bargain is probably the ultimate solution.
In terms of surviving a balkanized world the US will do much better relative to others who will reap the folly of their schadenfreude.
I will of course check with my cab driver at Charles de Gaulle for a correct world view - on a plane to Paris tonight. |
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