Straws in the wind? Interest rate anomaly

[nmap]

The interest rate markets for U.S. treasury securities seem to be experiencing unusual movement. It might suggest that large institutional investors are moving to a particularly conservative stance. One interpretation might be that they are concerned about (or expect) some future adverse developments in the economy.

Notice the linked chart: LINK (http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=2&mn=0&dy=0&id=p44145597942&a=183952353)

Back in mid-December 2008, the markets had taken a substantial tumble and things looked bad. Some may recall that this is the period when Paulson was pressing hard for the first bailout. Fear was rampant.

Notice that the interest rates on the various treasury maturities - 3 month, 6 month, 1 year, 2 year, and 5 year all hit lows at this time. In essence, people went to treasury securities to preserve capital during times that seemed uncertain.

We're down at the same (or nearly the same) levels again. Fear? Perhaps. Of what? Unknown.

On another front, the price for credit default swaps for Greek sovereign debt is up.

LINK1 (http://ftalphaville.ft.com/blog/2009/11/17/83741/its-all-greek-to-the-european-bond-market/)

LINK2 (http://www.bloomberg.com/apps/news?pid=20601110&sid=a7GQeqld1g3o)

Could we be looking at a default on Greek debt? Or something even wider?

:munchin

[GratefulCitizen]

The links referencing European debt status sparked a memory.

Had some beers and a good conversation with a Belgian engineer and his wife some year and a half ago while they were on holiday here.
He said that language was a significant barrier to commerce in the EU.
(oddly enough, he was flemish Belgian and she was french Belgian...)

For example: a colleague of his from Berkeley wanted some "official" documents/specification from something in his line of work.
In order for the doc/specs to be "official", they first had to be translated into every "official" EU language. (IIRC, 27 at the time)

Given the legal/language barriers, cultural differences, and historical animosities, I just don't see how the EU is going to fare well without a vibrant US economy.
Dominoes have yet to fall.



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On a side note, he said there was an idea floating around in his circles suggesting that Latin become the official language of the EU.
This would mitigate the advantage any one nation had over another in contracts.

Now that's one that will get some Bible believers thinking! :eek: