Disclaimer: For the first time in two and years of blogging I have been driven to swearing in a blog post. Apologies but I lack the words to express what’s happening.
A short post but there really isn’t a great deal to say.
We have falling equity prices, falling commodity prices, record low bond yields across UK, Germany and the US and the worst hit shares are financials (where rumors of problems in the European banking system are once again circulating) and those most exposed to global growth.
This is a growth scare – and a big one.
And George Osborne is still taking comfort in low yields on government debt and declaring Britain a ‘safe haven’.
I’m afraid a bond yield of 2.3% on 10 year UK government debt isn’t the market saying ‘well done you, nice deficit reduction plan you’ve got there mate’ it’s the market screaming ‘for Christ’s sake, everything is fucked and we’re terrified about vanishing growth’.
Markets, as we know, can be irrationally optimistic but they can of course also be irrationally pessimistic. Let’s hope that’s what’s happening now.