Keep waiting for a recovery

Commentary: It's 'Groundhog Day' again for the economy

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Another week, another public-policy adventure — but the political theater is nothing compared to the hysterics in the bond market.

The 10-year T-note in the three days after Nov. 12 leaped from the 2.5 percent area of the prior three months to 2.96 percent. This week, again in three days, 10-year Treasurys shot to 3.27 percent. A three-quarter-percent jump in less than one month is a big deal, especially as mortgages have done the same, jabbing a hole in housing’s life raft.

The first leg of the jump was routine and natural: Bonds were overbought in expectation of a double-dip recession, and in hopes that the Fed’s QE2 (a second round of quantitative easing) would force rates down.

This week’s second jump was the direct result of the tax-cut-extension deal, which re-ignited a blazing mental fur ball of deficits, inflation, money-printing and we’re-all-going-to-hell-in-10-seconds-or-less worry.