Make sense of all of this? May as well start with facts. The U.S. 10-year Treasury broke to 2.36 percent overnight, its lowest in more than a year. German 10-year notes reached an all-time low 1.04 percent, their 2-years trading below zero briefly, now paying 0.004 percent (ours are 0.432 percent), and Italian 10-years are rising in yield. These moves are “flight to quality.” The marker: no follow through in U.S. mortgages, still sitting close to 4.25 percent. When the world is scared it wants sovereign IOUs, not mortgage-backed securities, even if government-guaranteed. Unless the sovereign looks like it’s in trouble itself. To make sense, isolate the economic effects of this geopolitical circus from other forms of misery, and from the general course of economies. U.S. d...
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