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Be alert, careful, not afraid: "CREDIT EVENT" risk rises


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#1 dTraderB

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Posted 18 August 2023 - 12:22 AM

Been in markets long enough to know when to prepare for high risk event. Now is one such time, few days or longer.
HIGHER RISK IF CREDIT EVENT.
NOT FEARMONGERING, CRASH etc, but high risk that can trigger any major market instability. I have now gone into very small NET SHORT POSITION. Let us be alert & careful & we will get past this.

Lisa Abramowicz (@lisaabramowicz1) posted at 9:43 PM on Thu, Aug 17, 2023:
Mizuhos Dominic Konstantinos games out a 4.6% 10-year Treasury yield. You have to be very careful because because this undermines risk assets. This is very insidious. https://t.co/75qk1nUznT
(https://twitter.com/...3536403704?s=03)


James Choi (@JC_Investment) posted at 8:47 PM on Thu, Aug 17, 2023:
Bonds are crashing.

My estimate is that there's approximately 10% chance of this bond collapse could cause a credit event at this moment.

This probability can change over time, I will keep you updated.

#2 dTraderB

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Posted 18 August 2023 - 07:38 AM

"Yesterday, alarm bells sounded on both sides of the Atlantic as investors sold government bonds en masse, sending yields to multiyear highs. The 10-year Treasury note climbed to a height it last hit in the early days of the global financial crisis in 2008.

This sentiment trickled down to stocks and crypto. Bitcoin and Ethereum, the largest cryptocurrencies, plunged overnight, with Bitcoin sinking to a two-month low below $26,500. The Wall Street Journals report that SpaceX, Elon Musks rocket company, wrote down the value of its Bitcoin stake over the past two years and sold some of it hasnt improved sentiment around the highly volatile asset class.

Chinas woes are also weighing on global markets. The Hang Seng Index in Hong Kong fell into a bear market this morning as investors pulled back on Chinese stocks with the economy slowing and a property-market crisis brewing. This morning, analysts at Nomura were the latest to lower their forecast for Chinas growth. Adding to the jitters, the renminbi hit a 16-year low against the dollar this morning, prompting emergency moves to prop up the currency. That did little to soothe investors nerves"
- NYT DEALBOOK

#3 dTraderB

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Posted 18 August 2023 - 07:39 AM

Mortgage rates hit a 21-year high. The lending giant Freddie Mac said yesterday that the average rate on a 30-year mortgage, the most common home loan in America, surpassed 7 percent this week; a year ago it was at 5.19 percent. Ballooning rates for financing and a tight supply of homes are pricing an increasing number of Americans out of the housing market.

"Yesterday, alarm bells sounded on both sides of the Atlantic as investors sold government bonds en masse, sending yields to multiyear highs. The 10-year Treasury note climbed to a height it last hit in the early days of the global financial crisis in 2008.

This sentiment trickled down to stocks and crypto. Bitcoin and Ethereum, the largest cryptocurrencies, plunged overnight, with Bitcoin sinking to a two-month low below $26,500. The Wall Street Journals report that SpaceX, Elon Musks rocket company, wrote down the value of its Bitcoin stake over the past two years and sold some of it hasnt improved sentiment around the highly volatile asset class.

Chinas woes are also weighing on global markets. The Hang Seng Index in Hong Kong fell into a bear market this morning as investors pulled back on Chinese stocks with the economy slowing and a property-market crisis brewing. This morning, analysts at Nomura were the latest to lower their forecast for Chinas growth. Adding to the jitters, the renminbi hit a 16-year low against the dollar this morning, prompting emergency moves to prop up the currency. That did little to soothe investors nerves"
- NYT DEALBOOK



#4 dTraderB

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Posted 18 August 2023 - 07:43 AM

Ed

Edited by dTraderB, 18 August 2023 - 07:46 AM.


#5 12SPX

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Posted 18 August 2023 - 08:05 AM

Frank



#6 linrom1

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Posted 18 August 2023 - 08:19 AM

Market players are already taking the risk of credit event into account by dumping gold.

 



#7 redfoliage2

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Posted 18 August 2023 - 09:07 AM

Let's see if the opening gap gets filled today ............................



#8 OEXCHAOS

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Posted 18 August 2023 - 09:11 AM

FWIW, I'm looking at 3-month Financial Commercial Paper. As of Wednesday, this yield fell 5bp. Further, this is commanding just a 10bp premium to 3-month T-bills. Those who are exposed to the financial system by lending short to them are not really showing ANY concern.

I'm of the opinion that those lending large sums are more smart money. If something were wrong, somebody would be backing away from lending that money to those banks and financial institutions, but we're not seeing it.

 

Meanwhile, I have a "Secret Hedge Fund" Buy. Chances are, it's going to take a repeat signal to make a good low, but it is what it is.

 

Mark


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#9 redfoliage2

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Posted 18 August 2023 - 09:28 AM

The Fed is near the end of the rate hiking regardless the rate hype by the financial media .......................



#10 redfoliage2

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Posted 18 August 2023 - 12:06 PM

Let's see if the opening gap gets filled today ............................

Now with the gap back filled it's likely to go back down in the afternoon for the opening lows ....................


Edited by redfoliage2, 18 August 2023 - 12:14 PM.