Thought for the day : The panic in stock and bond markets sparked by the remarks of Fed Chairman Ben Bernanke, who on Wednesday suggested the Fed might start winding down its $85 billion per month in asset purchases, was compounded by the release of data on Thursday showing that Chinese manufacturing activity hit its lowest level in nine months. These developments point to two fundamental facts about the current economic situation: the continuing slump in the real economy and the extreme dependence of global financial markets on virtually free credit from the Federal Reserve and other central banks. Every asset class, including bonds of every duration and quality, fell sharply. Yields on ten-year US Treasury notes went as high as 2.47 percent during the day, up from 1.61 percent in May, before retreating as the stock sell-off intensified.
Posted on: Fri, 21 Jun 2013 14:42:59 +0000
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