What Happens Next?

Tyler Durden's picture

As we noted previously, each time the bond market has crashed in the last few decades, a financial crisis has quickly followed.


However, perhaps more perscient in the current exuberant 'buy the f**king all time highs' regime in US stocks, is the decoupling we have seen with global stocks.


Since the taper-tantrum in 2013, we have seen four 'meltdowns' in global bonds... and guess what happened next?


But it's probably different this time, right?

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LawsofPhysics's picture

Faith is lost and the truly productive find some temporary opportunity in the coming chaos.

same as it ever was motherfuckers.

thesonandheir's picture

Can't possibly go down. Equity guys are the smartest guys in the room.

robertsgt40's picture

Bombs away .  It really doesn't make any difference which craters first, bonds or equities .  Chicken or the egg. They're both joined at the financial hip. And both are connected with the same boat anchor, DEBT 

JRobby's picture

Shit blowing sideways into your face for 84 straight months.

That's different?  (This time)

Ghost of PartysOver's picture

Article is BS!  The last 4 times the market was not heavily manipulated by the Central Banks and Wall Street.  These are uncharted waters and I doubt any has a crystal ball.  It may crash down or may crash up.  Or may just stay range bound for years until it Reverts to The Mean of Normalcy.

SomethingSomethingDarkSide's picture

Are the Japanese still printing Yen?

Do they still use the Yen Carry Trade to purchase US Equities?

It would appear that the rally will stop when the Bank of Japan's insanity subsides..

Or is torn from them by reality, but I'd dare to assume any bailouts would be unanimous and unspoken at this time, Lehman moment's be damned.

LawsofPhysics's picture

It doesn't matter if stock go to the moon if what those equities are priced in won't buy shit!!!

Raffie's picture

We all know what is coming because the markets are defying mathematics and finical logic.

Remember the movie Tombstone and Val Kilmer says "Say when" THAT is what we are waiting for.


It will be over that fast for the global market I think.

Devils Advocate's picture

It is Definitely different this time, Obama is out!

pound the vix's picture

But the stock market can't go down.  Can it?

Soul Glow's picture

How about the bond market sell-off creates a bond market crash.

NoDebt's picture

"But it's probably different this time, right?"

Most definitely.


NoDebt's picture

Last 4 graphs.  3-4 month delay.


daveO's picture

March 2017. NYT's headline--- Stocks down 50%, welcome to the Trump economy. It's Hoover all over again.

Squid Viscous's picture

If your delay lasts for more than 4 months, call Dr. Bernanke

1777's picture

Comforting to know every time rates go up a smidgeon, the economy flips out. Nothing says 'robust' economy better!

Everything is Awesome!    BTFD

PTR's picture

What happens next?  A lot of people will have permanent grip marks around their ankles. 

KnuckleDragger-X's picture

All you have to know is somebody is making money, but it won't be you.....

1777's picture

'Bond market moves proceed moves in equities'.

If this is true you better buckle up!

JRobby's picture

(Laugh Track Deafening!!!!)

Baseball bat crushing skulls for the next 84 months straight. 

What chaos?

JohnGaltUk's picture

That is exactly what will happen, when the panic sets in and they all try exit the bond market the DOW and S&P could go to the moon because they have to park that big money somewhere. Look forward to the day where the bond market become illiquid and there are no bids. Why anyone would buy a 100 year soveriegn bond I have no idea, they need their head examined.

I an guessing there is a lot of pressure in the bond market at the moment because the baby boomers are retiring. In the USA I think it is about 10,000 a day. Have you noticed how many pension schemes are reporting shortfalls. Here in the UK estmates are about a 600 to 800 billion shortfall in pension funds. Most pension funds used a model based on 6 to 8% interest rate and they have not been able to get that type of yield now for well oover a decade. Then you have to assume that many pension funds will have taken more riskier position to obtain yield. When this blows up their are going to many older people wiped out and they will be angry and have nothing to lose.

The UK government has hidden much of their pension obligations which they will never be able to pay. What we are all about to witness is the end of socialism in the west and it is going to get very ugly. I notice how it cripples the state here in the UK where they have poured billions into the NHS and it is difficult to get an appointment with a doctor becuase a large chunk of the NHS budget will be those juicy pensions they offered all those years ago when the baby boomers were paying lots of tax and producing but now they are retiring so the government gets no tax and they become a cost. Socialism is a ponzi scheme, those who get out first do well but the baby boomers at the end 1957-64 are going to get screwed along with their children. Its fucken immoral.

While baby boomers borrowed to get free health service, cheap uni education and the rest off the free stuff they seemed ignorant that the debt they had created was going to enslave their own children and destroy their futures.

This is going to get interesting and you will see lots of civil unrest. I for one will be glad to see our self serving Police force finally have to work for their money and put their lives on the line. Instead of endless announcements about mindless initiatives, making Police shows to demonstrate how effective they are and why it is essential they have helicoptors.

khnum's picture

what happens next is the same as always NSA supercomputers front run the market and with limitless funds buy any of the crap dumped before its a problem

Bill of Rights's picture

The Market is pricing in the TRUMP tax cuts, if they are wrong you better grab your ass is all I have to say...

squilmi's picture

I think you're gonna need to grab your ass regardless.

mosfet's picture

What happens next is another 'Melt-Up' to DOW 20K when the Fed fails to hike in Dec.  Rinse-wash-repeat in March.

r3phl0x's picture

Had to down you. They're gonna raise in Dec (albeit by a tiny amount).

Seasmoke's picture

We sit here and get older.

alpha-protagonist's picture

Glad I played it conservatively since '08. I'd have been filthy rich right now and we all know how that ends...

RadioFlyer's picture
RadioFlyer (not verified) Nov 22, 2016 1:55 PM

DOW 33,333 or 66,666


ctrl+P infinity

Fed-up with being Sick and Tired's picture

Zero Hedge is getting repetitive.   This theme is recycled every time I read something here.   There is NOTHING that is like this period of time, though, and can we have a crash?   Sure, but it will be when even this Website turns positive and says, "all in."  It works that way.  There is relatively little exuberance, right?

Mr. Schmilkies's picture

If ZH ever says "go all in," I would say that would be fake news. 

JackT's picture

Does that mean the google ads get pulled?

wisebastard's picture

give me a C.....give me a R.....give me an A.........give me a S....give me a H.........what does that spell.........CRASH........GGGOOOO...... FED

Iconoclast421's picture

omg would you stop posting that chart equating 2004 to the global finacial crisis.

TheVoicesInYourHead's picture

The SNB(Swiss National Bank) is printing fast and furios and buying everyrhing in the USA.

This can go on forever.

tncaver's picture

I have been predicting for three years that the Federal Reserve will never raise interest rates again but I now think that the garden gnome may announce a quarter percentage rate hike.