Yields collapse again

Markets are struggling to price unknown tail risk in the banking system. The financial system is facing a confidence problem, not as extreme as the Global Financial Crisis, but unlike anything we've seen since then.

As a result, inflation fears have temporarily taken a back seat to risk management. Global investors herded into safe U.S. Treasuries today on existential concerns about Credit Suisse, a Global Systemically Important Bank (GSIB). Capital Economics notes that "Credit Suisse is in principle a much bigger concern for the global economy than the regional US banks."

To some investors, Credit Suisse's troubles are reminiscent of Bear Stearns, circa 2008. Coincidentally enough, tomorrow marks the 15-year anniversary of the former global investment bank's epic collapse, an event that led off the GFC.

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