The definition of safe haven, however, has changed in 2011. Money, seeking refuge from the evolving sovereign debt crisis since the fall of 2010, has been aggressively moving into gold. The negative half parabolas (red) illustrate this preference over Tbills and Tbonds as the crisis intensifies. Gold despite almost daily assurances from talking heads that everything remains the same has become preferred safe haven option in 2011. It may feel like 2008, but safe haven money flows suggest that it’s undeniably different.
U.S. Treasury Bonds Total Return Index (USTBTRI) AND USTBTRI to Gold Ratio
Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) to Gold Ratio
Headline: Is This Lehman Again? No, But It Sure Feels Like It
More than whether the European debt crisis is exploding, or if the US is re-entering a recession, or what the Federal Reserve's next move is, the markets want to know one thing: Is this another Lehman?
No word makes investors' blood run colder than "Lehman"-a reference, of course, to the Wall Street titan whose fall in September 2008 triggered the worst financial crisis since the Great Depression.
The short answer during the stock selloff Thursday was no, this is not a repeat of the scenario that ultimately sent the economy into a sharp recession and nearly capsized the entire global economy.
That, at least, was the view of market veterans of all stripes. On trading floors, though, the Lehman denials carried less weight, sending the major averages down as much as 4 percent just as a relief rally inspired hopes that perhaps the worst of the two-month slide was over.
Source: finance.yahoo.com
