Scary graphs
Further to the link below on Iceland in danger of declaring bankruptcy (yes, you heard that right – that’s a sovereign nation in Europe that can’t find anyone willing to lend it money), here are a few stunning graphs. Click to make them big.
This is the price of credit default swaps on Iceland’s sovereign debt – the higher the price, the more it costs to insure against a default by the country.
USD/ISK chart: A country’s currency is only as good as the central bank which backs it – the Icelandic Kroner has been savaged.
AUD/USD chart: The Aussie hasn’t fared too well either – slowing global growth = lower demand for commodities = less commodity prices. Also, people pull their money back into USD in times of turmoil (see today’s quicklinks). An expectation of narrowing interest rate differentials should also put short-term downward pressure on the AUD, but it actually rose when the RBA cut rates by a whole percent today. These are not rational times.
USD/ZWD: This graph doesn’t even make sense. With Zimbabwean inflation is 8-9 digits big, the country’s currency has become virtually meaningless.
The Dow Jones Industrial Index – the economic barometer that most US people watch.
The VIX chart (daily): colloquially known as the “fear index”, it measures market volatility (which indicates uncertainty).
The VIX hit an all-time high this week.
11:54pm (GMT -7.00) 
