The storm after the storm. Neither the weekend nor Monday night brought any advice and Tuesday morning started again under the sign of chaos. The collapse in the price of oil is not enough to console the loss of (paper) wealth that is melting under the blows of the crisis.
And the paradoxes abound. This sudden turn to ugliness in world markets was triggered by the downgrade of US government bonds, which, according to the rating agency Standard & Poor's, no longer deserve the full confidence of savers. The result? Investors rushed to buy US Treasuries, driving their yields down even further.
The judgments of the rating agencies have once again proved to be useless if not harmful (one thinks of the Triple A granted to the bonds that repackaged subprime mortgages). Some fund managers try to keep their heads together, reminding us that we're coming off a strong earnings season, and that now is the time to put cash to work and buy.
Source: Bloomberg
