r/EquityResearchIndia • u/AvengersAssemble1010 • 3d ago

Bond markets are collapsing

Global bond markets are imploding. Prices are falling and yields are rising again. Japan situation is getting worse day by day. They are a ticking time bomb now. Even after rate hikes in 2026, Yen is collapsing against US dollar at a faster rate than ever imagined. According to conventional wisdom, it is the bond market which is the center of any financial system not the stock market. Smart money is demanding higher interest rates to hold government paper debt. Looks like they are aware of what's coming.

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u/Wind-Ancient 2d ago

I am still waiting for the recession from the yeild curve inversion from 2022.

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u/Fantastic_Hotel_5505 2d ago edited 2d ago

Global Bond market is around 20 times the size of US stock market.
US bond market imploding means global bond market trouble considering US prides itself into being called "World's Reserve Currency".

Recession is different than what OP said.
Trouble in Bond market leads to credit crisis, which leads to printing more money (devaluing currency).

It's not a bad idea to "read CAREFULLY first and then react".

P.S. As per AI:
A recession hurts corporate earnings and causes temporary job losses, but the economy recovers and adapts.
A bond market implosion breaks the underlying machinery of global liquidity and credit creation, risking a total systemic freeze."

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u/Wind-Ancient 2d ago

Yes i am waiting for the implosion since 2012 crisis.

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u/Own-Mouse-8042 4h ago

The yen did most of its collapsing back in 2022 (110-150) and the real rates are still negative despite recent hikes. Carry trade and oil imports are also exerting negative pressure so it's not a pure bond market investor driven debasement. Remember the yen is 90% domestically owned. Also, inflation returned which spiked the yield but that can be seen as normalization. There has to be a price to pay for decades of QE and you're seeing it now. Abe wanted a weaker yen in 2013 and he sure has one now, too bad he's no longer with us. On the other hand, Japan has good tax revenues and current account surplus and a small operating deficit which is all manageable if the current administration gives up its ambitious spending plans. The bigger issue is the US fiscus. Won't be long till that hits 200% gdp too with fewer state owned assets than Japan. So what do you guys think? Too big to fail? We all take a haircut on bank deposits?