Related article: Interview: Peter Schiff still grim on future:
“It’s not just U.S. stocks and real estate that are going to lose value, but U.S. bonds. This is the last bubble yet to burst. I think we’re going to see a collapse of the bond market sometime during Obama’s first term, and interest rates are going to spiral out of control, and the dollar is going to just be destroyed.”
‘Fear’ will always manifest for you exactly what you are afraid of.
Investor fear drives US Treasury yields to near zero
WASHINGTON (AFP) – The panic in global financial markets has sparked an unprecedented rush into safe US Treasury securities, driving yields on short-term government notes down to almost zero.
Due to stampeding demand for safe short-term investments, the US Treasury’s four-week and three-month bills on Friday yielded an effective rate of 0.01 percent — down sharply from 1.515 percent and 1.785 percent, respectively, in early September.
Other Treasuries are also showing record low yields. The 10-year bond yield fell as low as 2.505 percent and the 30-year bond yield slid to 3.005 percent at one point on Friday. The six-month bond yielded a mere 0.20 percent.
The low yields reflect a surge in demand for these instruments, seen as the safest in the world during times of turmoil.
Doctors have warned that if a superbug which is known to be even more resistant to antibiotics than clostridium difficile and MRSA takes hold in hospitals, the country could face a pandemic.
The acinetobacter bug is being treated with older antibiotics because newer ones do not work. There are fears that injured soldiers returning from Iraq and Afghanistan have passed the infection on in civilian hospitals.
Prof Matthew Falagas, an expert in hospital-acquired infections, said: “In some cases, we have simply run out of treatments and we could be facing a pandemic with public health implications.”
He warned delegates at the Society for General Microbiology conference in Edinburgh: “Doctors in many countries have gone back to using old antibiotics that were abandoned 20 years ago because their toxic side-effects were so frequent and so bad.
Germany and other industrialized nations are desperately trying to brace themselves against the threat of a collapse of the global financial system. The crisis has now taken its toll on the German economy, where the weak dollar is putting jobs in jeopardy and the credit crunch is paralyzing many businesses.
A trader reacts in front of the DAX board at the Frankfurt stock exchange.
The Bundesbank, Germany’s central bank, doesn’t like to see its employees working too late, and it expects even senior staff members to be headed home by 8 p.m. On weekends, employees seeking to escape the confines of their own homes are required to sign in at the front desk and are accompanied to their own desks by a security guard. Sensitive documents are kept in safes in many offices, and a portion of Germany’s gold reserves is stored behind meter-thick, reinforced concrete walls in the basement of a nearby building. In this environment, working overtime is considered a security risk.But the ordinary working day has been in disarray in recent weeks at the Bundesbank headquarters building, a gray, concrete box in Frankfurt’s Ginnheim neighborhood, where the crisis on international financial markets has many employees working late, even on weekends.
LONDON (AFP) – European equities dived on Monday after heavy falls earlier in Asia as markets were gripped by growing concern that the US economy was slipping into recession, dealers said.
Stock markets inand the United States had sunk late last week following signs that the fallout from the US credit crisis was far from over.
In late morning European trade on Monday,, and Paris stock markets chalked up fresh losses of about 1.5 percent.
Asian stocks plunged earlier Monday withending down almost 4.5 percent, tumbled 3.07 percent and gave up 2.3 percent. and Sydney both shed about 3.0 percent.
“Not a great start to the week with thefollowing falls in the US Friday and Asia today,” said Mike Lenhoff, strategist at brokerage Brewin Dolphin.
“What matters most to investors is what is happening in the US. Investors view the US as in recession or going into recession which is not good news for corporate earnings and the market.”