” Ireland’s credit rating was cut one step by Standard & Poor’s to AA-, the lowest since 1995, on concern the rising cost of supporting the country’s struggling banks will swell the budget deficit. Sales of new homes in the U.S. probably held at a 330,000 annual pace in July, the second lowest on record, according to a Bloomberg survey before today’s report. Japanese Finance Minister Yoshihiko Noda pledged to take “appropriate action” to halt the yen’s rally.
“The flood of money into bonds reflects expectations of low inflation, low interest rates and low returns on equities and encapsulates a very cautious view of global growth, raising fears that this is the next bubble ready to burst,” David Hufton, managing director of London’s PVM Oil Associates Ltd., wrote in a report today. “Bond yields are in many cases at record lows, inviting predictions of a price collapse. This money is betting on a very muted global GDP growth at best.”