US 10-Year Treasury Bond Yield Falls to 60-Year Low, As World Is Getting Unhinged

If it's any comfort to the Japanese, the world (at least OECD members) seems to be joining Japan in getting out of control one way or another.

For the EU and the US, it is over the sovereign debt crisis that could lead to a global banking crisis, a la Lehman, this time potentially much bigger. The apparent safe haven bid is on the US dollar and the US Treasuries, which drove down the yield on 10-year bond to 1.896 percent earlier today.

The supposed trigger for today's move is the resignation, though planned, of the ECB board member Juergen Stark because of conflict over the central bank's bond buying program.

Earlier this year before March 11, Japan was one of the two countries (the other is China) who pledged to buy European debts to support the Euro regime (and support their export industries). I wonder if it is still doing that.

From Reuters (9/9/2011):

NEW YORK (Reuters) - Treasury debt prices rose on Friday, taking benchmark yields to the lowest in at least 60 years as investors looked for a safe haven on revived worries a European debt crisis could have a significant global impact.

Stocks plunged on Friday, losing over 2.5 percent and bolstering the safe-haven allure of U.S. government debt, with few investors looking to go into the weekend short Treasuries due to the uncertainty surrounding the European debt crisis.

The worries over Europe were sparked by the planned resignation of European Central Bank (ECB) Executive Board Member Juergen Stark. The ECB confirmed a Reuters report that said Stark was quitting because of a conflict over the central bank's bond buying program.

"The Stark resignation just kind of raises an eyebrow at a time when there's already concerns about what's going to happen next," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.

A debt swap meant to help Greece avoid default and win time to repair its tattered public finances hung in the balance Friday, with expectations of take-up by private creditors slipping amid fierce European pressure on Athens.

"There is a real danger that a European default or bank failure would lead to a global banking crisis akin to that seen after the fall of Lehman Brothers," said Paul Dales, U.S. economist at Capital Economics in Toronto.

Benchmark 10-year notes were trading 19/32 higher in price to yield 1.91 percent, down from 1.98 percent late Thursday. Benchmark yields touched 1.896 percent, marking the lowest since at least World War II.

(The article continues.)

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#Fukushima I Nuke Accident: EU's "Stress Test" For Nuclear Reactors Just like US's "Stress Test" for Wall Street Banks

To "learn" from the Fukushima I Nuke Plant accident, as the IAEA is to recommend, no doubt, the EU is going to conduct the "stress test" for the 143 reactors in Europe to see how Europe's nuclear facilities are able to withstand natural or man-made disasters.

Caveat?

The test is voluntary, and as one German MEP (member of European Parliament) contends, the check is "largely in the hands of operators".

Sound familiar?

It's just like the so-called "stress test" devised by the US Treasury Department and the Federal Reserve to assure the world that the US banking system was safe and sound, in the wake of September-November 2008's financial disaster that crashed the financial markets and triggered the worldwide recession. The "test" was not "voluntary" but the Treasury and the Fed handpicked which banks to do the "test". The banks knew exactly what they would be tested for, because for the most part they were the ones who told the regulators what parameters to test.

That should be very familiar to the Japanese, too. In Japan, at least in the past, when the fire department or the public health department conducted safety checks on the public facilities (hotels, restaurants, etc.) they used to "warn" those facilities days in advance about the inspection date and what to inspect.

Globalization is truly here.

From BBC News (6/9/2011):

MEPs split over nuclear 'stress tests'

MEPs have clashed over plans for "stress tests", which are due to be carried out on nuclear facilities in the EU.

There were angry scenes during the Commission statement on 9 June 2011, which caused Energy Commissioner Gunther Oettinger to appeal for calm.

Mr Oettinger was outlining plans for the tests - ordered in the wake of Japan's Fukushima disaster - which are designed to see how Europe's nuclear facilities are able to withstand natural or man-made disasters.

The so-called stress tests will be performed on Europe's 143 working reactors and other atomic installations and will consider a range of factors, including seismic activity, flooding, and power loss at reactors.

But German Green MEP Rebecca Harms dismissed the plans as a "paper check" designed to "downplay the risks of nuclear power".

Ms Harms attacked the voluntary nature of the tests, saying it left the checks "largely in the hands of operators".

Her comments were dismissed by fellow German MEP Herbert Reul, who described Ms Harms' opinion as "naïve".

Mr Reul praised the commissioner, saying that although the plans were "not 100% what we wanted", they would not be improved by other MEPs "complaining and harking on about it".

British conservative Giles Chichester protested about the "internal German discussion", and asked MEPs to focus on "the European issue".

Germany has recently announced that all of its nuclear power plants will be phased out by 2022, becoming the biggest industrial power to give up nuclear energy.

However Germany's nuclear industry has argued that an early shutdown would be hugely damaging to the country's industrial base.

Meanwhile countries including the UK, France and Poland have all announced further development of nuclear energy.

I wonder if there's an equivalent of "Saturday Night Live" in Europe. I hope they will make a wonderful spoof of this nuke plant "stress test", much like the SNL spoof on Geithner's "stress test" for banks. In case you missed that SNL skit from 2009, here it is.

(h/t Robbie001 for BBC News)

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