Climate of Fear Drives Yen Higher
The markets opened the week with a massive liquidation of risk as yen soared across the board with USD/JPY gaining 200+ points before finally finding some support at the 9600 level. News of the possibility of a GM bankruptcy hit the markets hard with Nikkei dropping -390 points for the day. One key concern for investors, aside of from the natural economic fallout of the failed automaker is the impact of a potential GM bankruptcy on major money center banks. The teetering automaker carries $300 Billion worth of debt and it is unclear as to how much of it will need to be written off should GM file for Chapter 11. As a result European banks such as Deutsche Bank and Commerzbank were sold heavily at the start of Frankfurt trade.