Banking & Finance

When 10-Year Treasury Yield Is Under 2%...

Jon C. Ogg

So much for hope… Seeing a 400 point drop in the DJIA all over again is one thing, but get this: THE TEN-YEAR TREASURY YIELD JUST WENT BACK UNDER 2.00%.  Dow Jones ran a headline that this is a record high on the 10-Year Treasury futures.  Go figure.

The recession (or the misnamed double-dip recession) is becoming more and more factored in.  Everyone hates the “this time is different” analogy, but it really is different this time.  The reason that Americans do not want to believe that another recession is underway is because this one is being led out of Europe.  The tax-and-coddle nations just do not understand the laws of money, but what can you expect from socialists anyway?

The 10-Year German Bund yield is also challenging 2% now with a yield seen of 2.05%.

And those hoping for the bounce in their 401/K and IRA accounts, let’s see…  The DJIA just hit -500 at 10,909… The lows last week were 10,719.94 on the close and 10,588.55 on an intraday low.  The S&P 500 is down 54 points at 1,139… The lows in this cycle in August were 1,119.38 on a closing basis and 1,101.54 on an intraday basis.  The S&P 500 Volatility Index, or the VIX, is now challenging the 40 level again and it peaked at 48 this last month before the bounce came.

The only place to hide is in these dividend stocks.  We previously gave 7 defensive stocks that would be immune to the S&P downgrade of the United States.  Even better, here is a top ten dividend portfolio that yields an average of 5.5% or so.  Unfortunately, finding winners when the DJIA is down 500 is a bit challenging.

There is at least one bit of silver lining here… When everyone is negative, that is when the markets give the opportunity for the next millionaires to make their great bargain buying picks.