Morning Bond Charts

The flip flop between equity and credit accelerates. Just as the administration managed to lower mortgage rates enough to get a moderate pick up in refi applications, bonds are starting to get out of control. The equity-bond flip flop is sure to inspire motion sickness for weeks and month as the powers that be attempt to valiantly balance out marginal confidence boosting improvements in 401(k) statements with nominal refinance applications in California foreclosure properties (all the while pretending that spiking commodity prices won't destroy company margins, and that the dollar's programmed crash will permit Europe to export even one BMW to its favorite all-consuming ally accross the Atlantic).

The 10 Year adjusted for inflation swap breakeven:

But we have space for more...With a conveniently higher market baseline from which to drop next time a correction is needed.

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