"If the creditor nations were to sell just a small proportion of their American assets, they could send Wall Street into a tailspin, with unpleasant implications for many Republicans. They are unlikely to push things that far but even if they were merely to slow the pace of their buying, bond yields would rocket and stocks could fall 15 percent in the space of a couple of weeks. A key thing here is that American asset valuations are at historic highs — the Standard & Poor’s 500 is on a P/E of 19 and long-term bonds yields are still near their lowest levels in decades."
Posted on: Mon, 30 Sep 2013 07:19:36 +0000
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