It was wild ride for the global bond and stock markets last week as participants reacted to fears of economic slowing in various global markets. These fears were exacerbated by comments from former Federal Reserve Chairman Alan Greenspan, some weak economic data in the U.S. as well as ongoing credit concerns related to the subprime mortgage market.

The hoopla largely began Tuesday in China when the Hang Seng dropped nearly 9% following news that the Chinese government would be clamping down on certain activities that have helped to spur growth there, including speculative buying using borrowed money. This ignited fears about the impact that slowing growth in the fastest-growing economy in the world might have on other world markets. This led to sharp drops in equities around the world, including a 416-point drop in the Dow on Tuesday, and a strong flight to quality bid. The 10-year Treasury rallied 29+/32nds that day with the yield dropping 11.6 basis points to 4.515%.

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