Never has the phrase, “get out of credit” had greater meaning than now. The equity bubble looks overdue to burst, without waiting for a rise in US bond yields to the 5.5%—6% level which we have been expecting. The loss of momentum in AI and related stocks, coupled with technical weakness in bank stocks suggest a credit crisis is with us now.
Before you reach for bonds, it’s worth pointing out that when the intial intervention wears off a credit crisis raises bond yields as well, so they do not provide an escape from the equity bear.
