Everybody knows by now that the bond market sold off like crazy yesterday. The 10 Year T-note's yield peaked at 5.25% before closing at 5.248% and the 30 Year peaked at 5.362% before settling at 5.356%. Who knows what the exact cause for this reason but I suspect it could be a combination of the following:
- Asian investors selling bonds to take their money and invest in the Shanghai Casino, err Composite
- Bond investors moving their money to higher yielding assets, like the Kiwi currency
- Inflation is finally catching up with us (It now costs me $9 for lunch where it cost me $5 only 3 years ago)
Maybe its some other undiscovered reason but the one thing I can predict, without a neural net, is that we will be in for another round of US Real Estate pain.