Just today, we witnessed risk aversion heading back into the markets. The high yielding currencies are being sold down massively against the safe haven USD -namely Aussie, Kiwi, Euro and even the Yen. The Dow is now down over 230 pts or 3 %.
See http://www.dbfx.com/ for the latest fx quotes.
More of this happening and it might feel like the July-Aug '08 selling off of the high yielders, leaving the world wondering what is going on behind the big moves, which we later came to know as big fund redemptions. But for now, we're still far from that. Furthermore, the high yielders are already at very low levels. Downside seems limited.
We're facing a very severe global economy saddled by financial disaster. Day by day, we're seeing more and more of the truth unravel and cans full of worms.
Let's hope the whole thing blows over quickly enough.
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