Grim Choice: Low Bond Yields or 50% Stock Crash

Written by Swiss America

graph 3078545 640Grim choice for investors: Accept very low bond yields or face a 50% crash in stocks -Marketwatch
"U.S. stocks have proved Teflon-esque bouncing back from politics, trade and economic worries, but the sellers look ready to stick around after Tuesday’s shocking U.S. manufacturing data and subsequent market fallout.

Stock futures and global equities are deep in the red for Wednesday....As stocks fell Tuesday, investors seeking a haven from economic concerns flocked to bonds, which drove yields down and prices higher. Our call of the day, from the president of Bianco Research, James Bianco says investors shouldn't wish for higher yields - a potential disaster for stocks....Bianco is convinced rates could go even lower...as central banks push interest rates further into negative territory and the global economy slows. But he thinks lots of investors haven't come to grips with that notion. 'A lot of people still think that safe, risk-free investment should still yield them 4% or 5%. But your reward for getting a 4% or 5% yield again is going to probably be a 30% or 50% decline in the stock market.'"