2023-10-28 15:03:37
The New York Stock Exchange in 2007, on the eve of the financial crisis Image: AFP
Yields on government bonds have risen sharply in a short period of time. This brings back unpleasant memories. Why the situation is different today than it was during the debt crisis 16 years ago – and what private investors should do.
Symbolism shouldn’t really play a role on the stock exchanges. But she does it anyway. This has become apparent in the past few days. Analysts and financial managers, who like to present themselves as sober calculators, were suddenly gripped by great unrest. This unrest was triggered by a single number: five percent.
Dennis Kremer
Editor in the “Value” department of the Frankfurter Allgemeine Sonntagszeitung.
The yield on American government bonds with a ten-year term had risen to that same five percent, and was even slightly higher. Anyone who rarely deals with the ups and downs on the markets may understandably consider this to be a rather unimportant movement. But the specialists immediately confirmed that this had last happened in 2007. Just remembering what followed back then is horrifying for many financial market professionals: first the American housing crisis of 2007/2008, which culminated in the bankruptcy of the investment bank Lehman Brothers, then a deep recession and soon afterwards the European sovereign debt crisis. Many private investors suffered painful losses.
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