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2018-02-02

A bond market shock of biblical proportions is now just around the corner

Any security with a positive yield or prospect for even modest appreciation became a target for repo-style leveraged speculation. 

Traders bought the "asset" on 70-95% leverage, and did so with brimming confidence that they could roll the funding over and over again at virtually zero nominal cost.



The pity is that a bond market shock of biblical proportions is now just around the corner---yet neither end of the Acela Corridor sees it coming.

So now is the time to head for the emergency exits.


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Acela is Amtrak's flagship service along the Northeast Corridor (NEC) in the Northeastern United States between Washington, D.C. and Boston via 14 intermediate stops including Baltimore, Philadelphia, and New York City. /Wikipedia

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