Global Bonds Lose $1.7 Trillion In November, Worst Monthly Meltdown On Record

In early October, when speaking before the NY Fed, Bridgewater’s Ray Dalio made a prophetic warning: a 1% rise in yields from near-record low level would trigger “the worst decline in bonds since the 1981 bond market crash.” Less than two months later he has been proven right because while we have yet to see a move quite as large as the one Dalio envisioned, the November surge in global yields has already resulted in the worst monthly loss in the Bloomberg Barclays Global Aggregate Total Return Index, which lost 4% in November, the deepest slump since the gauge’s inception in 1990, and equivalent to $1.7 trillion in losses to $45.1 trillion.
***
Over the past two months, the cumulative loss in the index’s market value is now a massive $2.8 trillion leading leading Bloomberg to declare that “the 30-year-old bull market in bonds looks to be ending with a bang.”
The conventional wisdom behind the move is by now familiar: hopes for U. S. economic momentum and Donald Trump’s election win, with promises of tax cuts and $1 trillion in infrastructure spending, have spurred investors to dump debt that was offering near-record-low yields and pile into stocks.

This post was published at Zero Hedge on Dec 1, 2016.