A Lannister Always Pays His Debts... Unless It's Treasury Bills!
Hark loyal subjects! Your Khaleesi Daenerys Stormborn of the House Targaryen First of Her Name Queen of the Andals and the First Men Protector of the Seven Kingdoms the Mother of Dragons the Khaleesi of the Great Grass Sea the Unburnt Breaker of Chains now reports on… bonds? Yes even a queen must concern herself with the small matters for doth not a kingdom rise or fall on its economy? It seems the bond market is more turbulent than Drogon after a bad batch of sheep. Prices are tumbling faster than the Unsullied after a night of grog and yields are spiking like wildfire at the Battle of Blackwater. Is this a sign of the Long Night upon us? Or just… Trump?
Tariffs Tariffs Everywhere Nor Any Coin to Save!
President Trump's tariffs have kicked in like a Lannister plot hitting Chinese imports with a 104% rate – higher than the Mad King’s pyromania score. China retaliated faster than you can say 'Dracarys' and now the world is swimming in trade turmoil. Even the S&P 500 is down losing 12% in a mere four days. Usually when the seas are rough investors seek shelter in bonds but not this time. It's as if the Iron Fleet is made of paper boats! Even Henry Allen of Deutsche Bank is saying bonds are losing their 'traditional haven status.' Is nothing sacred anymore? Next they'll be melting down the Iron Throne for scrap!
Hedge Funds Margin Calls and Other Beasts of Wall Street
Traders are scurrying like mice throwing out theories like poisoned wine. Forced selling margin calls foreign holders dumping bonds… It’s a regular siege of King’s Landing in the financial world. A 10 year bond auction looms like a dragon's shadow and the largest holders of these bonds – Japan China the U.K. – are precisely the countries targeted by these tariffs. Are they going to start using their U.S. financial assets as weapons? It's like using the dragons' fire against themselves! I Daenerys find it rather amusing.
Trump's Triumph Turns To Tragedy Faster Than a Wedding at the Twins
The White House was boasting about lower rates patting themselves on the back like they’d just won the Battle of the Bastards. But now the 10 year Treasury yield is up and Ed Yardeni is warning that foreigners might start selling their US Treasuries. It seems those pesky dragons of economics have a way of scorching even the best laid plans. 'When you play the game of thrones you win or you die.' Or in this case you trigger a recession.
The Fed: Stuck Between a Dragon and a Hard Place
The Federal Reserve is now in a pickle like Tyrion after a wine tasting contest. They might be hesitant to cut rates because of rising inflation but if rates keep spiking they might have no choice. However even a rate cut could backfire leading to more inflation. It’s a classic Catch 22 as confusing as Varys's allegiances. 'I will do what queens do. I will rule.'
Winter is Coming... For Your Portfolio!
So dear readers what is a queen to do? Should I unleash my dragons on Wall Street? Perhaps a fiery breath would clear the air. Alas my advisors tell me that is 'not fiscally responsible.' Very well let us hope that common sense – or a good old fashioned prophecy – can save us from this economic winter. And if not? Well at least we’ll have dragons.
Bond market Treasury yields Trump tariffs trade war recession fears inflation Federal Reserve Deutsche Bank US Treasuries market sell-off
Comments
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khmusicman
Is anyone else worried about the Night King and the bond yields?
teaspoon
The Fed is playing a dangerous game.
KidAirsoft
This is all Cersei's fault!
powerson
I'd rather face the Dothraki horde than deal with this market.
Shaswat
Tariffs are the real enemy.
LDStarling
Daenerys, please save us from this economic disaster!
JamKea3
Maybe we should just melt down the Iron Throne and use the gold.
mykey1
Winter is coming...and so is inflation!
MJany
Dracarys to the bond market!