The Market Warns: There Are Still Major Cracks in the System The municipal bond ETF moved sharply higher when the Fed made its announcement, but has since gone flat. Is this issue fixed because the Fed will buy these bonds? The market doesn't seem to think so. And the municipal bond market is just one such issue. Take a look at the corporate bond market below. The Fed has announced it will buy investment grade and high yield corporate bonds with unlimited funds. And yet, both of them are rolling over after an initial "sugar high" on the announcements. There are $10 trillion in corporate bonds in the U.S. At least $3 trillion of this is junk in actuality. Will the companies that issues these bonds be able to overcome the economic shutdown and consequent loss of revenues simply because the Fed is buying these bonds? Again, the market doesn't seem to think so. My point with this article is to urge you to ignore the narrative that things are returning to normal. They are not. We had a sugar high in the markets based on a massive Fed intervention. That sugar high is now wearing off. We'll soon find out what the underlying realities are. Best Regards, Graham Summers Editor, Money & Crisis P.S. My colleague and America's #1 Futurist George Gilder just gave a jaw-dropping headline — "This market story will dwarf 5G…" 5G could indeed enjoy a "second gold rush," as plenty of pundits are saying, but George explains that there is a story no one is talking about… something that he likes to call "15G." Click here to hear what the man who predicted the smartphone in 1994 is now saying about 5G. |
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