It was a good 180 year run. With the collapsing bond market, inflation, rising prices due to over regulation, supply chain issues from COVID policies, shortages due to the Ukraine/Russia conflict, and globalism in general run amok is it time to resurrect the misery index?
I’m not a financial guru. I don’t actively invest in the bond market either. But, I read the Wall Street Journal in order to have a basic working knowledge of what’s happening in the financial and business world. Today there was a gem of an article on the crisis in the bond market.
The U.S. bond market has had positive returns, before inflation, in all but four years since 1976. Even in 1994, when the Federal Reserve raised interest rates six times for a total of 2.5 percentage points, bonds lost only 3% in the aggregate.
Almost never has the U.S. bond market lost as much money as in the first four months of 2022, according to Edward McQuarrie, an emeritus professor of business at Santa Clara University who studies asset returns over the centuries.
Long-term Treasury bonds lost more than 18% this year through Apr. 30. That surpasses the previous record, a loss of 17% in the 12 months ending in March 1980, says Mr. McQuarrie. The broad bond market has performed worse so far in 2022, he says, than in any complete year since 1792 except one. That was all the way back in 1842, when a deep depression approached rock-bottom.
The Worst Bond Market Since 1842 – WSJ