The Bond Market Is Having A Historic Panic Attack

By Quoth the Raven

Never before has it been more evident why the bond market is considered the “smart money” and equity market is considered the “dumb money”.

One only needs to look at recent examples, like Bed Bath & Beyond, whose bonds traded for pennies on the dollar while its equity soared and retail tried to generate a short squeeze (despite the fact that the company was heading directly toward bankruptcy) for proof.

In fact, there have been innumerable other examples similar to Bed Bath & Beyond in other meme stocks over the last couple years, but the general point is that bond markets almost always lead the equity markets in assessing risk, helped along by the fact that bonds (1) trade in large increments and (2) are difficult for most retail traders to transact and understand, assuring that unsophisticated investors can’t manipulate them.