USA lost it's AAA after the close of business on 5 August. We would expect the yields on government bonds to jump (USA is now a more risky asset) when the market opens on Monday 8 August.
Didn't happen. Yields continued down only moving back to what it was pre-downgrade in the last two days. So what happened?
- There's disagreement within the ranks. Moodys and Fitch did not lower the US rating.
- There's nothing else in the world to buy.
- China's not selling it's portfolio anytime soon.
1 comments:
Your assessment abou there is nothing else in the world to buy is accurate. We have become a global economy - and everybody is having problesm.
The question is: what will solve it - and who will take those steps - or will anyone?
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