The good news, I think, is that this stock rally probably doesn't have a lot more legs wich means that money will rotate back to bonds or at least enough to keep a bid under them for now.
But let's think about this in the very simplest terms: (for the less technically inclined, as Kunstler says, bonds trade inversely to interest rates and thus when rates go up the value of the bonds go down.
So here we are printing massive amounts of government, corporate and junk bonds, all of which have nowhere to go invalue but down unless governments go further in the unconventional direction (i.e., negative nominal rates).
Ayeeh! talk about WMD. But if there is to ever be an exit then most of the paper is going to have to have been moved to the short end in order to eliminate principal exposure. So I guess the game is about duration? Issuers want suckers to risk huge amounts of principal in order to loan them money at very low rates for a very long time, investors want to stay as short as possible in order to avoid that but get no yield.
Headache time, I have to think about this.
