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The Bond Says Worry

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You like equities? You gotta root against the bonds. You hate equities, the bonds are your friends. You want the market to go to 7400, you gotta hope the 30-year bond ramps to the 4.75% level. It is at 4.92% as I write this.

Wow, is this counterintuitive from everything we know for the last 20 years? But it is the gospel. It has to do with the fact that guys like me, hedgies, just stare at that bond because we know it can't lie. And that bond is saying something, mostly that the world is going to %#$&^#&^ in a handbasket. The bond simply isn't supposed to be here given the manufacturing index, the housing market, the auto market, the retail market, the oil market, the gold market. But the bond is so liquid and so truthful that I don't think it reflects a short squeeze -- that all of that current data are nullified. The bond says we must be worried.

As the battle here is against systemic risk -- in other words, that the system will fail, the center will not hold -- if you see the bond sell off (interest rates go up), that's good news!

Most people who do what I do can't believe this 30-year bond's rally. It is so unprecedented, so scary, that it has everybody spooked and fooled, so I dare not hazard a guess where it goes. But I know from here, if bonds go up (rates go down) the market is going


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, not higher. Amazing.

James J. Cramer is manager of a hedge fund and co-chairman of

Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending a letter to at