"Treasuries are still a comparatively low-risk asset. I think there's no doubt about that," said Michael Schumacher, a strategist at UBS in Stamford, Connecticut.
Fears over slowing global growth, in tandem with the still-unresolved turmoil in the euro zone, have led investors to flood safe havens that in some cases have been unable to cope.
The Swiss National Bank last week announced a shock interest rate cut in a bid to stem flows into the country that have sent the Swiss franc soaring. BNY Mellon (BK.N) also said it would implement a new fee for some large deposits, citing "sudden, significant increases" in funds.
With over $9 trillion in marketable Treasuries outstanding, the U.S. debt market is one of few able to meet the demand.
But the markets also ignored President Obama speech trying to restore confidence in the stock markets as they plunged deep into the red.
"Markets will always rise and fall," Obama told the nation. "No matter what some agency may say, we've always been and always will be a AAA country."
For all the troubles the U.S. faces, Obama said, the country continues to have the best universities, most productive workers, and "the determination to shape our future."
"We're going to need to summon that spirit today," he continued.
Many cable TV news outlets ran the President's remarks along with a split screen of the financial market's plummeting numbers. While Obama spoke, MSNBC briefly flashed a split screen showing the Dow Industrial Average dropping beneath 11,000.
The Dow ended up down 633 points, the S&P 500 was off 80 points, or 6 2/3% and the NASDAQ lost almost 7% shedding 175 points. An absolute bloodbath in the markets today...and despite 63% of Americans favoring job bills over spending cuts, Republicans are insisting confidence has been lost because we haven't cut enough spending in a recession yet. Basically just about everything that could go wrong today went wrong.
Notable stock hits: Bank of America completely cratered, falling to under $6.50 a share as AIG (yes, the same AIG) sued the bank for $10 billion in damages from subprime mortgage losses over the weekend, and the floodgates on that led to a massive 21% drop in stock value.
If BoA manages to actually go under, today's losses are going to look like a pleasant dream compared to the next couple of weeks/months.
Strap in, people. It's go time.
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