It’s approaching 2 AM ET…. the leaders of the world met over the weekend to prepare to throw everything they have to stop any panic today in the finnancial market.
Europe is just waking up and still a couple hours fom their markets opening. The real volatitlity won’t show up until the American markets start to trade at 9:30 AM.
So what are the reactions so far?
– the EU/US$ exchange rate is fairly stable – probably reflecting that we both have problems. This lkely will change when Europe starts trading
– interest rates for the other AAA sovereign debt issuers are plunging as people are (apparently) moving moving out of US Treasuries – but New Zealand and Australia don’t have that much debt to trade – that’s part of why they are AAA
– US treasury rates are going up – but only part of the way they dropped just before S&P dropped the bombshell on Tim Geithner
– crude oil prices are dropping a LOT – the reports I read generally are suggesting that the private equity firms that speculate in oil are pulling their money out, and some of it is forced sales – the more it drops, the more people who will have to close out their positions
– Gold is up a lot – those predictions of $2000/ounce look doable in a few days. With leaders in the United States saying “Don’t worry, we can always print more dollars”, they clearly don’t understand the problem they are feeding
– Stock indexes suggest about a 2% drop in the stock market, but it’s too early to put much faith in that – when the US traders start showing up around 8 AM, then we’ll know what is happening. Asian markets are down about 3%, and they close fairly soon.