The final folly. Rates and banks roar towards recession

In 2020, we saw a blowoff in stimulus. In 2021, we saw a blowoff in growth and equities. So far in 2022, we have seen a blowoff in inflation and commodities.

Now we are seeing a blowoff in interest rates and bond yields:

Banking funding costs have started to spike too:

The Aussie curve is now pricing an outright boom:

Dislocating entirely from Planet Earth where recession is approaching like an oncoming locomotive:

Thus, in classic cyclical style, Aussie banks have started to outperform as well:

The question is: is Australia really on another planet? Or is this just another crazed act of markets that are increasingly seized by high-frequency rotation?

Sell the bank rip and buy bond dip is my bet (not advice, of course).

Houses and Holes
Latest posts by Houses and Holes (see all)

Comments are hidden for Membership Subscribers only.