Monday Bond Market Danger

[theheretic]

For those who weren't paying attention, the global economy hit a speed bump last week. Investors panicked, justifiably, because federal spending is going to pretty well stop on frivolous crap. Since many business sectors rely on those frivolous spending dollars, they're going to take the shot right in the heuvos. This also impacts oil demand, since

Comments

Gila Copter NSFW

[theheretic]

We will not be angry victims no more.

[gwendally]

I disagree with your assertions about the S&P downgrade. Only one rating agency downgraded and I don't think most mutual funds will have to sell. Furthermore, the market already KNEW what a fucked up mess the US budget is in, S&P didn't have to tell them. The smart money already knows this. It's only the people who need to be in treasuries for one reason or another - trade deficits, pension funds, inter-agency funds - that are buying anyway. And even if someone somewhere were suddenly shocked to notice debt at 90% of GDP and a 10% budget deficit, the signalling all Friday afternoon didn't lower bond prices. So, no, I don't think there will be bond action on Monday. Not the kind you think

[theheretic]

Thank you for your response. However, I must point out, now that the stock market has been open for 90 minutes, that its crashing hard, down -331 points (-2.9%) and the day is still very young. S&P is down -3.5% and NASDAQ is down -3.9%. And the trouble here and the EU are feeding back on themselves, tipping the world markets into crashing too. European stock markets are down -2.2-3.5% and Asia is down -2.2

[evilref]

The whole of the West has been living on credit, assuming that economic growth will pay the interest.

When economic growth stopped in 2008, the debt and interest remained. This is true throughout the West, not just the US and the EU.

The only sane country in this is Iceland.