Thread by @pleasesaveour

Underneath the headline numbers were a series of movements that don’t really make sense when lined up against one another. They amount to signs that something is breaking down in the workings of the financial system

nytimes.com/2020/03/12/ups…

Bond prices and stock prices were moving together not in opposite directions as they usually do

On a day when maj econ disruptions resulting from the pandemic appeared to become likelier many of them fell instead. That included bonds of all sorts and gold.

And there were reports from trading desks that many assets that are normally liquid — easy to buy and sell — were freezing up with securities not trading widely. This was true of the bonds issued by municipalities and major corporations but, more curiously, also of Treasury bonds

Any one of these moves on its own wouldn’t really matter. Markets can move for all kinds of reasons. But these types of swings give exp financial market watchers a sinking feeling the kind last felt widely during the global financial crisis

There has also been a wide gap between the prices of certain exchange traded funds which are easily traded and the securities on which those funds are based. This is irrational, in theory — the equivalent of a 12-pack of soda selling for more than the price of 12 individual sodas

Gold futures have been falling, despite gold's historical role as a place for safety during tumultuous economic times

All this suggests that major financial players are experiencing a cash crunch, and are selling whatever they can as a result.

The volatility in markets in the last few weeks reflects the deep uncertainty about the near future of the world economy. But for now it is being compounded by something strange happening just beneath the surface

Call your planners about your 401K's folks