What Is The Bond Market Trying To Tell Us?

It was a pretty historic day in the credit market with prices rising and yields falling to practically unheard of levels. Not only are yields unbelievably low but the speed at which they have fallen is unprecedented. Jansen at Across the Curve tells the story better than anyone. When you get to his site, the link is to part 1 of a two part post about the market today, hit the home button and look for the second post.

I tend not to be a doom and gloom sort of person. I've felt that we would muddle through all of this, albeit with some discomfort. The moves in the credit markets, however, are causing me more than a little discomfort. I want to believe that there are technical factors as well as emotion driving bond prices so high, yet I can't shake a nagging feeling that the market may be telling us something we would just as soon not know.

Tom Lindmark