© Reuters
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Investing.com – Global government bonds suffered their worst loss streak since 1949, according to a report from investment bank Bank of America.
The bank warns that the collapse of bonds will lead to insolvency of individuals and institutions in huge transactions and their inability to pay, and this will have a contagious effect, as once a single country defaults, the deficit will be passed on to everyone. countries (which is known as credit disasters). It will also lead countries to liquidate their assets.
This is what the Bank of Japan did yesterday, which for the first time in 20 years sold its 10-year holdings to provide dollar liquidity to the markets and save the yen from deteriorating against the United States, which is today. climbed to a new high in two decades.
Bank of America (NYSE 🙂 predicts inflation, interest rate hikes and recession shocks are not over yet, bond slump in recent weeks means credit spreads widen, stocks fall and these destructive moves continue for some time.
The Bank of America’s Bull and Bear Index indicates “extreme pessimism” with investor sentiment falling to the lowest levels since the 2007-08 global financial crisis.
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