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Bloomberg just flashed this chart on Bloomberg TV – and I think very illustrative of a potentially much larger problem.

The problem, of course, being a big one if you can foresee a scenario whereby this Bloomberg headline reads “China” or “Japan” … “Cutting Exposure To US Treasuries”…

While we do not have that data point yet… we certainly should be managing risk around that potential scenario.

Unlike the US Government’s new idea of risk management “stress tests”, real risk managers manage the risk that lies out on the tails.
KM