Feverish thinking

30 April 2009 By Edward Hadas Follow @edwardhadas

European stocks have erased this year s losses. US Treasury yields are above 3%. Killer flu? No worries. Negative growth? Not for long. A kind of flight from safety is underway. It shows the medicinal power of monetary and fiscal injections. But painful side effects will follow.

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Context News

The Dow Jones Stoxx 600 European index hit a 2009 high on April 30. The S&P 500 hit a threemonth high on April 29.

The US economy shrank by 6.1% in the first quarter, more than the 4.9% decline that analysts predicted.

The yield on 10year Treasury notes rose to 3.1% before easing to 3% on April 29.

Eurozone bank lending to the private sector declined by 3.2% yearonyear in March compared to a 4.3% yearonyear decline in February.

Unemployment in the eurozone rose to a record 8.9% in March up from 8.5% in February.

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