Paul Krugman's columns today, http://www.nytimes.com/2008/10/10/opinion/10krugman.html?_r=1&oref=slogin and below; also, Salon's revelation that international grain shipments have come to a standstill http://www.salon.com/tech/htww/2008/10/10/real_economy_paralysis/index.html?source=rss&aim=/tech/htww
Faustian bargains
I’ve lately become a reader of Across the Curve, the blog of the bond trader John Jansen. It’s jargon-heavy — sometimes even I have to look up the terms he uses — but in a time of disordered markets (does anyone actually manage to borrow at Libor these days) it’s really helpful to have reports from a “tone and feel of the markets” guy who can tell you what the numbers can’t.
And his opening comment this morning is a shocker. After describing some of the weird action in Treasuries, he says:
Is this the beginning of the end for the dollar and the Treasury market? Is this the first sign of the bursting of the bubble in Treasury securities? That market, in a sense, represents the ultimate bubble as it exists at the whim and caprice of foreign investors, who have as participants in a Faustian bargain, financed our war(s) and our lifestyle so generously over the last decade. Maybe even that bizarre construct is crashing about us as we speak.
Maybe I should be drinking something a bit more … calming .. than coffee right now.
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