Amazing and long overdue world-wide action on Friday

All three major stock-market indexes crashed on Friday. The volume was very high, but not excessive considering the size of the move. Government bonds around the world also plunged sending, for example, most of the German bonds from negative to positive interest rates. Here, the 30-year U.S. 30-Year Bond plunged more than did the 10-year of 5-year. It is very unusual for both the government bonds and stock market to move big in the same direction on the same day. Most of the time, money flows from the bonds to the stocks, or vice versa.

Could this be the beginning of the long overdue popping of the mother of all financial bubbles? Let us pray! The result will include interest rates at reasonable levels, high enough to end the war on savers, the stock market so low and so out of favor that stocks, now in the stratosphere of being overpriced, that very solid growth companies will be priced at bargain prices. Central banks around the world have bought government (and corporate) bonds in order to push down prices. The dump of these same bonds on Friday, shows that the market is much much bigger than even coordinated government and central-bank action.

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