Chart of the Day: 10YR Treasury Yields @ 2.96%

A: Ugh, not the most bullish of signals when 10yr Treasury yields barrel lower through the 3% level. Investors are fleeing into safety looking for return of money instead of return on money. No doubt the bulls will come out of the woodwork and start to declare how 'wonderful a time it is to buy and lock in a low mortgage rate'. Back here on earth, the reality is uncertainty over the recovery, deflationary pressures, sovereign debt, debt rollovers, city/state deficits, high unemployment, etc..

Take a look at the recent sharp decline in yields for the 10YR Treasury via Yahoo Finance:



There are those that will look to the reasons why the 10YR is behaving this way and there are those that will look to the effects of the 10YR behaving this way. One view is bearish, the other is bullish. Expect brokers to spin this negative market move in a positive way to cover up some of the reasons why treasuries are rallying so much recently; away from risk assets into safety.

Barron's discusses, "Crazy Treasury Bulls Get It Right":

For those who are listening, record-low Treasury note yields are screaming an unambiguous message: the market is discounting deflationary, depression conditions, even if mainstream economists are not.

Contrarians no doubt will be going against this move, but that is when something unexpected usually comes along and jolts the markets. Lets see if that is how this will play out.