The international investment community is once again faced with a nightmare many believed had left permanently before. Especially the new investors, who have not felt a major turmoil in their portfolios, or a deep crisis in «skin» I would like to thank the rapporteur for his work. The sales surge sweeping global bond markets does not merely constitute a technical correction or a transient turbulence of indicators. It's something bigger. This is a structural destabilization of what is considered more «sure» Market. Certainly because it is signed by the States themselves.
The sharp ejecting of government debt returns, from American to European bonds, awakens memories from the collapse of Lehman Brothers in 2008. By raising a serious question. Is the global financial system heading towards a new systemic crisis? Where the position of American mortgage loans has today taken state bonds and debts, or as the Anglo-Saxons say «subeign debt».
The X-ray of turmoil
Over the last few days, government bond yields have recorded a long-term high. The performance of the American 10-year bond tries to uplift the tolerable psychological limits of investors, while in Europe the German Bund and the French 30-year-old touched levels that had to occur since the 2008 crisis. Even in the Eurozone region, the pressures are obvious.
When bond prices decline and yields increase, the message is clear. Investors require a larger premium to maintain state debt. Longer performance. Larger «compensation». This is because the basic economic theory that government bonds are the absolute «Security shelter» It is tested very hard.
The main causes of the sell-off
The present crisis was not manifested in a test tube or in an isolated environment. Its manifestation is the result of a dangerous intersection of geopolitical, fiscal and monetary factors. An intersection that works multiply, in terms of the side effects created. And so investors liquidate their bonds without tomorrow. Waiting for the next to be accompanied by higher interest rates and more tempting odds.
Geopolitical instability and oil shock
escalating tensions in the Middle East and attacks on critical energy infrastructure pushed Brent oil prices above $90 a barrel. As a result, the rise in energy prices revives inflationary pressures, cancelling the scenarios for a rapid de-escalation of interest rates that central banks had in their plans.
Financial derailment and over-supply of debt
Governments of G7 countries issue record debt. The huge deficits in the US and the need to finance the defence industry and the energy transition to Europe have flooded the market with titles. To such an extent that supply far exceeds demand.
A new factor has been introduced in the over-supply of debt and alongside the needs for government debt financing. And this is the huge capital needs for the development of Artificial Intelligence absorb billions of dollars from the markets. As a result of the development of a State Bond Competitive Product.
The attitude of the Central Banks
With inflation remaining persistent, Fed and ECB are forced to maintain the «firm» Monetary policy. The era of cheap money and quantitative relaxation (QE) has gone unreturned.
Why Markets Fear a New Lehman Brothers
Fear of a systemic crash is not unfounded. In the 2008 crisis, the problem was identified in toxic housing loans that had been securitised and transformed into moving investment bombs. Today, the corresponding risk is not visible on the balance sheets of financial institutions, which are loaded with government bonds purchased when interest rates were zero or negative.
And here lies the big trap. Bond portfolios do not exist «actual losses». However, as returns increase, the market value of older bonds is declining. So banks, pension funds and insurance institutions are faced with «Accounting» hundreds of billions of dollars. So if a financial institution is pressured or forced to liquidate these bonds to meet liquidity needs, accounting losses are converted instantly into real ones, threatening its solvency.
Today's not some «long»equity positions or some «exposures» which should be closed in d(t), as we had seen dramatically in the most realistic film «Marchin Call» 2011 where a large investment company collapses due to «depreciation» her portfolio and her people have just 24 hours to save what they can from her fortune and career.
They are the bonds themselves, the government debts themselves, which are in the eye of the investment cyclone.
Public debt service costs
The rise in interest rates means that governments are asked to pay tens of billions more for interest only. G7 states are estimated to be burdened with additional cost of serving tens of billions of dollars. At the same time this vicious cycle increases the risk of downgrading the credit capacity of countries with high debt, creating a potential domino «insolvency» In the markets.
Transmission to the real economy
Η αύξηση των αποδόσεων των ομολόγων δεν μένει στις οθόνες των χρηματιστηριακών συναλλαγών. Συμπαρασύρει άμεσα τα επιτόκια των στεγαστικών και επιχειρηματικών δανείων. Το αυξημένο κόστος δανεισμού «παγώνει» την επενδυτική δραστηριότητα, πιέζει τις κερδοφορίες των εταιρειών και απειλεί να οδηγήσει τις οικονομίες σε βαθιά ύφεση. Και φυσικά οδηγεί σε αναγκαστική αύξηση των φόρων.
Η ελληνική διάσταση
Για την Ελλάδα, το διεθνές sell-off αποτελεί μια σοβαρή υπενθύμιση ότι η επίτευξη της επενδυτικής βαθμίδας δεν προσφέρει πλήρη ανοσία. Παρά τη βελτίωση των θεμελιωδών μεγεθών της ελληνικής οικονομίας, το υψηλό ποσοστό δημόσιου χρέους ως προς το ΑΕΠ καθιστά τη χώρα ευάλωτη στις διεθνείς αναταράξεις. Όταν το κόστος δανεισμού της Γερμανίας και της Γαλλίας αυξάνεται, η πίεση στην ελληνική αγορά ομολόγων είναι αναπόφευκτη. Η δημοσιονομική σοβαρότητα και η διατήρηση των πρωτογενών πλεονασμάτων δεν αποτελούν απλά μια ορθή και νοικοκυρεμένη επιλογή. Αποτελεί συνθήκη επιβίωσης. Και είναι απορίας άξιον, πως τα κόμματα της αντιπολίτευσης παριστάνουν τους «φορολέοντες», υποσχόμενα ρυθμίσεις επί ρυθμίσεων και διαγραφές χρεών, με άρωμα σεισάχθειας.
Οι αγορές εκπέμπουν σήμα κινδύνου
Η ψευδαίσθηση ότι τα κράτη μπορούν να δανείζονται επ’ άπειρον χωρίς κόστος, έχει καταρρεύσει. Αν οι κεντρικές τράπεζες και οι κυβερνήσεις δεν συντονίσουν τις ενέργειές τους για την συγκράτηση των ελλειμμάτων και την αποκατάσταση της εμπιστοσύνης, το σημερινό sell-off των ομολόγων μπορεί να μετατραπεί στον θρυαλλίδα μιας νέας παγκόσμιας χρηματοπιστωτικής κρίσης. Η ιστορία του 2008 μας δίδαξε ότι όταν η πίστη στα θεμελιώδη δεδομένα του συστήματος κλονίζεται, τότε η κατάρρευση μπορεί να είναι ραγδαία και ανεξέλεγκτη.
