If there was any doubt, the European sovereign crisis is now officially over. Yields on Spanish and Italian 10-year notes are at the lowest ever.
In the US, 10-year yields are back at 2.60% even as the Fed tapers. Bond bears have been beaten senseless.
The Treasury bear in his 2014 state
Bill O’Donnell, head of Treasury research at RBS:
“Global investors appear to be seeking yield in all liquid fixed income markets, despite risks, and this end-user demand is slow-roasting long term shorts who leak carry, roll and total return every day.”
The stock market never goes down no matter the news, hard assets like housing continue to defy gravity.
The world is awash in money and when money that isn’t enough, borrowing rates are so low that any asset that offers a positive yield is eaten whole. There is nothing on the horizon that will change the paradigm.