{"id":7448,"date":"2015-04-21T05:47:21","date_gmt":"2015-04-21T10:47:21","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7448"},"modified":"2015-04-21T05:47:21","modified_gmt":"2015-04-21T10:47:21","slug":"guess-what-happened-the-last-time-bond-yields-crashed-like-this","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7448","title":{"rendered":"Guess What Happened The Last Time Bond Yields Crashed Like This?\u2026"},"content":{"rendered":"

Guess What Happened The Last Time Bond Yields Crashed Like This?\u2026<\/a><\/h3>\n

If a major financial crisis was approaching, we would expect to see the \u201csmart money\u201d getting out of stocks and pouring into government bonds that are traditionally considered to be \u201csafe\u201d during a crisis.\u00a0 This is called a \u201cflight to safety\u201d or a \u201cflight to quality<\/a>\u201c.\u00a0 In the past, when there has been a \u201cflight to quality\u201d we have seen yields for German government bonds and U.S. government bonds go way down.\u00a0 As you will see below, this is exactly what we witnessed during the financial crisis of 2008.\u00a0 U.S. and German bond yields plummeted as money from the stock market was dumped into bonds at a staggering pace.\u00a0 Well, it is starting to happen again.\u00a0 In recent months we have seen U.S. and German bond yields begin to plummet as the \u201csmart money\u201d moves out of the stock market.\u00a0 So is this another sign that we are on the precipice of a significant financial panic?<\/p>\n

Back in 2008, German bonds actually began to plunge well before U.S. bonds did.\u00a0 Does that mean that European money is \u201csmarter\u201d than U.S. money?\u00a0 That would certainly be a very interesting theory to explore.\u00a0 As you can see from the chart below, the yield on 10 year German bonds started to fall significantly during the summer of 2008 \u2013 several months before the stock market crash in the fall\u2026<\/p>\n

\"German<\/a><\/p>\n

So what are German bonds doing today?<\/p>\n

As you can see from this next chart, the yield on 10 year German bonds has been steadily falling since the beginning of last year.\u00a0 At this point, the yield on 10 year German bonds is just barely above zero\u2026<\/p>\n

\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Guess What Happened The Last Time Bond Yields Crashed Like This?\u2026 If a major financial crisis was approaching, we would expect to see the \u201csmart money\u201d getting out of stocks and pouring into government bonds that are traditionally considered to be \u201csafe\u201d during a crisis.\u00a0 This is called a \u201cflight to safety\u201d or a \u201cflight […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3186,312,4860,500,501,1264],"class_list":["post-7448","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bond-yields","tag-financial-crisis","tag-financial-panic","tag-market-collapse","tag-market-crash","tag-recession"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7448","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7448"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7448\/revisions"}],"predecessor-version":[{"id":7449,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7448\/revisions\/7449"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7448"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}