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The global stock market and bond markets are in a state of panic over the coronavirus. Day after day it's been a case of lower and lower yields.

This morning, the yield on the 30-year long bond crashed another 24 basis points to yet another record low. The entire yield curve is below 1.0%. Yet inversions persist out to two years.


The 30-year long bond yield is now inverted with the Fed Funds Rates by 12 basis points.

The Fed is going to cut rates to zero on its next move.

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What's Happening?

  1. Oil Price War and Liquidity Crisis Coming
  2. Crude Dives to $30, a Whopping $20 Below Cost of Production
  3. Italy Quarantines Over 25% of the Population, Trump Not Concerned
  4. Very Deflationary Outcome Has Begun: Blame the Fed

This is precisely what happens when Fed-sponsored asset bubbles break.

But other than that, It's Just Like The Flu™ .

Mike "Mish" Shedlock