Posted on 02/17/2010 5:36:39 PM PST by Kartographer
Jitters over Chinese credit tightening and default risks in Greece and Dubai are causing bond vigilantes to batten down the hatches across the world, bringing the most dramatic credit rally for a century to a shuddering halt.
The Markit iTraxx Crossover index measuring yields on lower-grade debt has jumped by almost 130 basis points since mid-January to 514, while the main index of investment grade bonds has jumped by a third to 93. "This is the biggest move since the financial crisis in early 2009, said Gavan Nolan, Markit's credit analyst.
(Excerpt) Read more at businessinsider.com ...
This is impossible because The One calmed all financial troubles with the magic of The Stimulus.
Dargoola on Feb 17, 8:29 AM said:
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Vigilantes ride again. If the trend gathers steam then the second phase of the crisis has arrived.
This strengthens my contention that we’re in “The Frankenstein Economy”: deflation and inflation co-existing side by side, creating a perfect storm. Deflation of key assets such as real estate, social security, medicare pensions and 401Ks. Inflation for key commodities, taxes of every stripe, food, energy, national and homeland security, credit healthcare etc...
But this applies to sovereigns as well as individuals.
We’re seeing the creeping results of debt-deflation around the world (Japan!). Sovereigns will compete for more limited funds that they need just to roll over and service debt. Ultimately translating into higher interest rates for corporations as well as govs. All the while the tax base will continue to shrink (soveriegn deflation).
Tell that to millions of Americans paying 27%+ interest on credit cards and other high interest loans.
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