I’m glad I’m away this weekend, this is all getting too much for me. Here are some graphs from the FT.
Stocks are way down. This does not augur well for growth.
Investors are also fleeing to safety, interest rates on even sclerotic UK and dysfunctional US government debt are down.
Since last week and last month these governments can borrow cheaply, not because they are well run (have you seen George Osborne?), it is because they are less of a basket case than many others. We’re seeing a flight to safety.
The Bank of England, Federal Reserve and European Central bank need to act quickly to stem the market’s (and my) panic. They need to reaffirm a commitment to providing liquidity if it is needed and they need to commit to reflating the core Western economies so they can deleverage and expand more easily. I’m getting that 1937/2008 feeling again.