THE TELEGRAPH: A flight to safety on Wall Street caused yields on 3-month US treasury notes to plummet at the steepest pace since modern records began, eclipsing moves at the height of the 1987 stock market crash.
The big freeze?
Investors fled the $2,500bn (£1,260bn) money market that usually serves as a safe-haven in times of turbulence, responding to reports that funds may be exposed to sub-prime mortgage debt and asset-backed commercial paper. "This is a sign of significant fear in the financial system," said one banker.
However, the Dow, after sinking nearly 100 points in early trading, staged a late rally and ended up 42 points at 13,121, as the pile into treasury notes eased later in the day.
Traders were initially unsettled by news that Deutsche Bank had tapped the credit window of the US Federal Reserve after the emergency half-point cut in the discount rate last Friday. Banks are typically reluctant to use the facility, fearing that it could send off a distress signal. US bond yields plunge at record rate (more) By Ambrose Evans-Pritchard and David Litterick
Mark Alexander
