Summary of Before the pound got pounded, Germany's bond market had sent the world a historic warning.

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The video discusses how the German bond market sent a warning to the world in 2008 before the pound got pounded. The yield curve inversion indicated money market tensions were increasing, and the recent flattening of the bond curve is a sign of trouble brewing.

  • 00:00:00 Germany's bond market has inverted for the first time ever, signaling that the global economy may be in for a much worse future. This unprecedented inversion is just one of many warning signs that have been occurring recently.
  • 00:05:00 In June of 2008, the ECB was concerned about high oil prices and inflation expectations, and decided to hike interest rates. This is similar to what is happening in 2018.
  • 00:10:00 In March 2008, the spread between the five-year mobile and the 10-year bond had narrowed to 23 basis points, signaling a 34 basis point compression in the German yield curve. This flattening was a cause for concern because it suggested that the financial system was hedging more than not against deflationary outcomes. In June 2008, the yield curve inversion followed a press conference in which the ECB discussed raising interest rates.
  • 00:15:00 The German bond market sent a warning to the rest of the world in 2008, before the pound was beaten badly. The yield curve inversion indicated money market tensions were increasing, and the recent flattening of the bond curve is a sign of trouble brewing.
  • 00:20:00 The video discusses how Germany's bond market sent the world a historic warning before the pound got pounded in 2008. The marketplace is saying that ongoing money market tensions and at some point, this will be a serious problem that even Central Bankers will no longer be able to play psychology about.

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