“It’s A Global Margin Call. I Hope We Survive”

Contact Your Elected Officials
Zero Hedge Header

One week after former NY Fed guru Marc Cabana (who needs no introduction but in case someone is unfamiliar,ย please read this), warned that the Fed could follow in the BOE’s footsteps, as “the Fed wants to blindly pursue its quest to get inflation down but deteriorating market functioning or frozen credit could push them to intervene.” Then, Cabana – whose pre-crisis predictive track record is matched only by that of Zoltan Pozsar – explicitly warned that the next market to break will be the Treasury market or as he put it, “UST breakdown is a growing risk” to wit:

Thin UST liquidity & limited demand may make the US market vulnerable to a market functioning breakdown, similar to UK. UST breakdown catalyst is unclear but could include: large scale foreign FX intervention to weaken USD / sell USTs, US fiscal shock in Nov with surprising D Congress hold, higher spending for natural disasters, etc.

And while the devastation to the economy and markets would be unprecedented, the silver lining according to Cabana is that “an unanchored UST market may be fastest & most disruptive way to tighten conditions & lower inflation.” Then again, a broken Treasury market would have far more terrifying and catastrophic consequences than just “lower inflation” – it would destroy the US, and western economy, overnight. Which begs the question, which Cabana implicitly posed:ย does the Fed want to slow the economy, or have it come to a crashing halt?

While Cabana’s warning – which will come true, it’s just a matter of time – has yet to manifest itself in a breach of the US Treasury market, it is effectively describing the slow-motion collapse in the European government bond market to a T.

And not just today’s latest collapse in UK bonds: asย Asia Times’s David Goldman writes overnight, risk gauges in Germanyโ€™s government debt market rose last week to levels higher than recorded in the 2008 world financial crash, “as margin calls forced the liquidation of derivatives positions held by banks, insurers and pension funds.”

By Tyler Durden

Read Full Article on ZeroHedge.com

Zero Hedge
Zero Hedgehttps://www.zerohedge.com/
It is the goal of Zero Hedge to widen the scope of financial, economic and political information available to the professional investing public.

Why the Trump Administration is Sitting on the Epstein Files

President Trump, AG Bondi, and FBI Dir. Patel have the advantage over us in that they see the big overall picture when it comes to the Epstein List.

Trumpโ€™s โ€œMajor Statementโ€ On Russia Is A Clumsy Attempt To Thread The Needle

The โ€œmajor statementโ€ on Russia Trump hyped up turned out to be an attempt to thread the needle between escalating US involvement in Ukrainian and walking away from it.

AI Takes Customer Service from Doublespeak to Triplespeak

Corporations are replacing customer service agents with AI agents. Here's a real-life example of attempting to use AI to have my internet restored.

The Left’s Descent into Extremismย ย 

The political left, from mainstream Dems to radical Antifa, have embraced extremism, alienating swaths of the public and undermining their own influence.

Roger Stone Speaks About Trump at Turning Point USA

Longtime Donald Trump friend, Roger Stone, gave a speech at the 2025 TPUSA convention offering his take on the recent Epstein List controversy.

Border Czar Says Physical Appearance โ€˜Canโ€™t Be the Sole Reasonโ€™ to Detain Someone

Border czar Homan said comments were โ€œtaken out of contextโ€ and federal immigration enforcement agents can't detain people based on physical appearances alone.

Capacity of US Coal-Fired Power Plants to Fall Over 15 Percent by 2028

Total operating capacity of coal-fired power plants in US is set to drop to 145 GW by end of 2028, a 15% decline from the 172 GW in operation as of May.

Violence Against ICE Escalates Across America

ICE officers face increased confrontation on the street, which crosses the line between free speech and physical violence.

International Buyers Purchased $56 Billion Worth of US Homes in 1 Year

Foreign buyers purchased $56 billion worth of existing homes in the US between April 2024 and March 2025, up by 33.2% from the previous 12 months.

DOGE Announces Billions of Dollars in Federal Contracts Terminated

In post on X on July 12, DOGE, stated that โ€œover the last week, agencies terminated 230 wasteful contracts,โ€ resulting in savings of $407 million.

Trump to Announce $70 Billion Energy and Innovation Investment in Pittsburgh

President Trump is meeting with business leaders to discuss how best to meet the energy and computing needs of the future.

Attorney General Pam Bondi Dismisses Justice Departmentโ€™s Top Ethics Lawyer

AG Pam Bondi terminated the head of the DOJโ€™s ethics division, according to a letter posted to social media by the fired official.

Trumpโ€™s Potential Secondary Tariffs on Russia Would Clobber China, India

President Trump said he will impose โ€œvery severeโ€ secondary tariffs on Russia if President Putin does not agree to a cease-fire with Ukraine in 50 days. (09-14-22)
spot_img

Related Articles