In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:
- The Unsinkable Market
- No data is bad enough to stop its rise
- The Disappearance Of Volatility
- Gone, but for how long?
- Failing Pension Plans
- A truly massive crisis in the making
- Cash, Gold & Bitcoin
- The only places for capital to find safety?
During these doldrum days of summer, where no matter the news, today's "unsinkable" markets continue to march ever upwards, Mish shares his thoughts on what will finally cause asset prices to tank:
It’s probably going to take a change in the bond market. and that doesn't necessarily mean that rates have to go up. It means that the bond market gets spooked by something.
A huge percentage of loans that get issued are covenant-lite. These things have zero protections. Some of these bond offerings let the bondholders be paid back with more bonds, not even actual, real payments — and their interest at absurdly low levels for the amount of risk involved. I think we just we need to see a change in the bond market. I think that's what's likely to prick it.
What it takes to get to that point, I don't know. We’ve seen these things change on a dime before without any apparent reason. It happened in housing where people were standing in lines one week for the right to buy a Florida condo to zero lines and everyone wanting to dump their Florida condos.