Losses on longer-dated Treasuries are beginning to rival some of the most notorious market meltdowns in US history.

Bonds maturing in 10 years or more have slumped 46% since peaking in March 2020, according to data compiled by Bloomberg. That’s just shy of the 49% plunge in US stocks in the aftermath of the dot-com bust at the turn of the century. The rout in 30-year bonds has been even worse, tumbling 53%, nearing the 57% slump in equities during the depths of the financial crisis.

We haven’t seen anything like this in many years.

As bond yields go up, bond prices go down.

And the last time the yield on 10 year bonds rose to this level was “just before the 2008 financial crisis”…

At the center of the storm is the 10-year Treasury yield, one of the most influential numbers in finance. The yield, which represents borrowing costs for issuers of bonds, has climbed steadily in recent weeks and reached 4.8% on Tuesday, a level last seen just before the 2008 financial crisis.

We are witnessing the exact same pattern that we witnessed in 2008 and during other financial panics.

Bonds crash first, and then stocks crash later.

I have warned over and over again that high interest rates were going to have an absolutely devastating impact on our system, and now it is staring to happen.

Our banks are going to be in so much trouble.  They were already sitting on hundreds of billons of dollars in unrealized losses, and the spike in bond yields in recent weeks has pushed that number even higher.

Meanwhile, mortgage rates continue to soar…

Freddie Mac’s latest Primary Mortgage Market Survey released Thursday shows the average rate for the benchmark 30-year fixed-rate mortgage jumped to 7.49%, up from 7.31% last week and from 6.66% a year ago.

The rate for a 15-year mortgage also climbed, averaging 6.78% after coming in last week at 6.72%. One year ago, the rate on a 15-year fixed note averaged 5.9%.

These high rates are absolutely paralyzing the housing market.

Millions of potential buyers have been forced to the sidelines, because high rates have made housing “unaffordable” in 99 percent of all U.S. counties…

Housing prices are growing more unaffordable even with the astronomical rise in mortgage rates, putting ownership out of reach for millions of Americans.

That’s according to a new report published by real estate data provider ATTOM, which examined 572 U.S. counties and determined that median home prices in 99% of those areas are out of reach for the average income earner, who makes about $71,214 annually.

“The latest trend continues a two-year pattern of homeownership getting more and more difficult for average U.S. wage earners,” the report said.

The home prices that we are seeing today are absolutely insane.

Recently, a 565 square foot house in West Hollywood “sold for a whopping $1.1 million”…

A miniature home in Los Angeles’ West Hollywood neighborhood recently sold for a whopping $1.1 million despite only offering 565 square feet inside.

The 1924 Craftsman-bungalow – settled on a 2.240 square foot lot – is tucked away behind a row of hedges and located just across the street from a fire station.

I couldn’t imagine paying that much for a glorified closet. But apparently someone out there had money to burn.

Of course most homes are not selling at this point. In fact, sales of existing homes have fallen by about a third over the past year. So something has got to give. Either the Federal Reserve has got to dramatically reduce interest rates or home prices have got to fall. And the Federal Reserve is not planning to reduce interest rates any time soon.

Unfortunately, Fed officials keep talking about the possibility of raising them even higher. So a lot more pain is coming, and the American people are getting restless.

If you can believe it, a recent Rasmussen survey discovered that more than half of all U.S. adults believe that we will experience “another Great Depression” within the next few years…

Despite claims by President Joe Biden about the strength of America’s economy, most Americans still think we’re headed toward another Great Depression.

The latest Rasmussen Reports national telephone and online survey finds that 52% of American Adults believe it is likely that, over the next few years, the United States will enter a 1930s-like depression, including 21% who say a major depression is Very Likely. Thirty-six percent (36%) don’t think another Great Depression is likely over the next few years, including 11% who say it’s Not At All Likely. Another 11% are not sure.

Even though they may not understand the specifics, most Americans can feel that something has gone horribly wrong. But things didn’t have to turn out this way.

You see, the truth is that we didn’t learn our lessons from the last financial crisis. Instead of fixing the system, we created bubbles that were even bigger. Now that bonds have crashed, it is just a matter of time before stocks crash too. And we are headed for an economic meltdown of epic proportions.

The months and years ahead are going to be incredibly challenging. So I hope that you have been preparing for difficult times, because the nightmare that many of us have been warning about has already begun.

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“We forget that there’s also a banking crisis going on, so there’s going to be some pain that’s really going to cripple small and medium businesses. We are going to see some tough times and are probably going to see this play out in markets,” Moya added according to a report by Market Watch. 

Analysts have been discussing a recession for well over a year, and it has yet to happen. However, the warning signs are glaring red right now. Just a day ago, a surprise oil-production cut announcement led by Saudi Arabia over the weekend put the prospects of $100-per-barrel oil prices back on the radar, and initially seemed bad for inflation. As Monday’s trading wore on, investors regarded higher oil prices as beneficial for some United States companies and used the OPEC+ announcement as an opportunity to drive Dow Industrials and the S&P 500 to a higher finish.

While Tuesday’s job-openings data generally supports the idea that a softer labor market could help ease wage pressures, investors appeared to be more focused on the signs it is sending about the prospects for economic growth, according to Moya. “We now seem comfortable living with $100-a-barrel oil and, right now, it’s pretty clear we are recession-bound. There were a lot of people thinking an oil spike would keep inflation jitters in place, but it seems like there’s too much weakness in the economy to do that.” –Market Watch.

Others don’t believe that others are going to be a recession at all and that things will progress as “normal” and the system will continue to “function” as it has with the Federal Reserve in full control.

TD Securities in New York is one company that doesn’t see a growing risk of a recession since “the labor market is quite strong,”  said Gennadiy Goldberg, a senior U.S. rates strategist at TD Securities. The firm expects Friday’s nonfarm payroll report to show a gain of 270,000 jobs in March, above the 238,000 median forecast of economists polled by The Wall Street Journal.

“We are starting to see the first signs that the labor market is starting to react to tighter financial conditions,” Goldberg said. “But we can’t take away much from this about the next few payrolls or the depth of the next recession.

Article cross-posted from SHTF Plan.