“The bond market is the most important market in the world,”

 Bonds have long been considered the most boring bit of finance. Ian Fleming chose the name Bond for his spy because he thought it was “the dullest name I’ve ever heard”.

“The bond market is the most important market in the world,” says Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater. “It is the backbone of all other markets.”

 The global bond market was worth about $141tn at the end of 2022. That is, for now, smaller than the $183tn that the Financial Stability Board estimates banks hold globally 

 “Shadow banking” is what some academics call the part of the financial system that resembles, but falls outside traditional banking. 

Policymakers prefer the less malevolent-sounding — but almost comically obtuse — term “non-bank financial institutions”. 

At $240tn, this system is now far bigger than its conventional counterpart. The bond market is its main component

Robin Wigglesworth Financial Times 3 August 2023

https://www.ft.com/content/5631cc22-a04d-405c-9154-e307f938f8f3


Banks Need to Worry About Shadow Banks

https://englundmacro.blogspot.com/2022/11/banks-need-to-worry-about-shadow-banks.html


Bonds Are Useless Hedge for Stock Losses  

Correlation strengthens as bonds sell off along with stocks

Ye Xie Bloomberg 2 August 2023

https://www.bloomberg.com/news/articles/2023-08-02/bonds-are-useless-hedge-for-stock-losses-as-correlation-jumps


US Two-year yields last hit these levels in 2007

https://englundmacro.blogspot.com/2023/07/us-two-year-yields-last-hit-these.html


Kommentarer

Populära inlägg i den här bloggen

Det svänger fort på räntemarknaden

Fjolåret blev strålande för flera av de största fondbolagen

Börsen i Stockholm och New York 4-5 augusti 2024