Fears of a severe recession gripped financial markets on Thursday as dire US unemployment figures helped drive long-term interest rates to record lows.
Economic news across the world was almost uniformly bad as slumping Japanese exports threatened to push the economy deeper into recession and the Swiss central bank unexpectedly slashed interest rates by a full percentage point.
Officials in China warned that the employment outlook was becoming “grim” as the global crisis triggered fresh factory closures in the export sector.
The rising risk of a deflationary crunch also sparked a general sell-off in equity prices and pushed oil prices below $50 a barrel for the first time since 2005.
Some short-term US Treasury bills were quoted below zero per cent. Two-year bond yields at one point fell to 0.96 per cent, the lowest since the two-year note was created in 1976. Yields on the 30-year bond fell to a record low of 3.71 per cent.
The bailout plan for the three American Automotive Industry has stalled out and does not look like it will happen any time soon.
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