http://www.blacklistednews.com/The_Trigger_Has_Been_Pulled_And_The_Slaughter_Of_The_Bonds_Has_Begun_/26929/0/0/0/Y/M.html
The Trigger Has Been Pulled And The Slaughter Of The Bonds Has Begun
June 26, 2013
Source: Economic Collapse
What does it look like when a 30 year bull market ends abruptly? What happens when bond yields start doing things that they haven’t done in 50 years? If your answer to those questions involves the word “slaughter”, you are probably on the right track. Right now, bonds are being absolutely slaughtered, and this is only just the beginning. Over the last several years, reckless bond buying by the Federal Reserve has forced yields down to absolutely ridiculous levels. For example, it simply is not rational to lend the U.S. government money at less than 3 percent when the real rate of inflation is somewhere up around 8 to 10 percent. But when he originally announced the quantitative easing program, Federal Reserve Chairman Ben Bernanke said that he intended to force interest rates to go down, and lots of bond investors made a lot of money riding the bubble that Bernanke created. But now that Bernanke has indicated that the bond buying will be coming to an end, investors are going into panic mode and the bond bubble is starting to burst. One hedge fund executive toldCNBC that the “feeling you are getting out there is that people are selling first and asking questions later”. And the yield on 10 year U.S. Treasuries just keeps going up. Today it closed at 2.59 percent, and many believe that it is going to go much higher unless the Fed intervenes. If the Fed does not intervene and allows the bubble that it has created to burst, we are going to see unprecedented carnage.
Markets tend to fall faster than they rise. And now that Bernanke has triggered a sell-off in bonds, things are moving much faster than just about anyone anticipated…
Wall Street never thought it would be this bad.
continue @ link above
and a quote:
Please understand how many of these interest rate derivatives work. When the rates go against you, “margin” must be posted. By “margin” I mean collateral. Collateral must be shifted from the losing institution to the one on the winning side. When the loser “runs out” of collateral…that is when you get a situation similar to MF Global or Lehman Bros., they are forced to shut down and the vultures then come in and pick the bones clean…normally. Now it is no longer “normal,” now a Lehman Bros will take the whole tent down.
Subject: The Trigger Has Been Pulled And The Slaughter Of The Bonds Has Begun 
Wed Jun 26, 2013 10:37 am
