Yield on 10-year Spanish bonds remains stubbornly high near 7%, but yield on 2-year bonds is in the midst of a breathtaking crash.
click on any chart for sharper image
Spain 10-Year Government Bond Yield
One month ago, when tracing the so far modest contagion from the recent surge in Libor rates, we tracked it down in an unexpected location: Japan. As we reported at the time, "some Japanese lenders have been trying to pre-empt the Libor blow out. Sumitomo Mitsui Financial Group cut its global CP and CD funding by $7 billion in the year to June, while a $28 billion jump in deposits outpaced a $19 billion increase in lending globally, according to Deutsche Bank.
Just as the president reminded us yesterday we are not a deadbeat nation, merely borrowing money today to pay the bills of yesterday, so, as the NY Times reports in this all-too-real article, many of the citizens of the US are also living not just paycheck-to-paycheck but short-term-loan-to-short-term-loan.
The US government just took the first major step to signal its concerns over the congressional standoff over the nation's debt limit. On Thursday, the Treasury Department announced that it was suspending the monthly auction of two-year notes scheduled for October 27.
If there was one major lesson that the UK government has learned over the past five years is that it is a mistake for a government to slash fiscal investment spending when interest rates are low. After all, if interest pays near zero, then virtually any other type of investment will produce a return greater than zero.
China faces epic unintended consequences in its efforts to 'manage' everything. As Bloomberg rhetorically asks, what if a central bank cut interest rates and borrowing costs rose? Well that didn't work out as expected, eh?
As the ongoing collapse in economic productivity continues in America, and Alan Greenspan's concerns grow, the call for an end to the diversion of corporate spending to instantly shareholder-friendly actions comes from an unusual source.
Inspired by Scotland's hopes for independence and hot on the heels of Crime'a 95% preference for accession to Russia, 89% of the citizens of Venice voted for their own sovereign state in a ‘referendum’ on independence from Italy.
By Joe Firestone, Ph.D., Managing Director, CEO of the Knowledge Management Consortium International (KMCI), and Director of KMCI’s CKIM Certificate program. He taught political science as the graduate and undergraduate level and blogs regularly at Corrente, Firedoglake and Daily Kos as letsgetitdone.