Let me see here. We got to witness bond yields collapse again today, in spite of a looming budget crisis in Congress and the potential for ratings downgrades.
Just why did those yields go down? Because of one sentence representing an ancient rule of thumb.
Yields go with the market.
Look you simians, try to wrap your heads around this. It is totally possible that the market collapses and yields blow out. Especially if the market collapses because treasuries collapse.
It is completely unacceptable to me that treasuries are trading in a perfectly normal curve with virtually no premium attached given just a three week deadline for two ideologically driven groups of zealots to make a massive and complicated deal.
If you are so scared of equities, why not just go to cash and forgo lending your money to an entity with $14T of debt. Is the prospect of inflation really so terrible that you can’t bring yourself to question such nonsensical dogma?
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I think it goes to show the odds the bond dudes are placing on default risk.
In other words: none.
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That’s how they get you.