Any time there is a major sell-off in stock, bonds usually are the beneficiary. The problem this time around is that interest rates are already so low that one has to wonder how much the price of longer-dated Treasury bonds can really rally. Now keep in mind that interest rates had become insultingly low in Europe.

The most recent sell-off is coming from a massive tank in Asia, particularly in Shanghai. It is effectively an unavoidable slowdown in China that the market worries will turn into a recession for the world’s largest nation that has been the world’s growth engine.

Here is how the Shanghai reaction looked in ETF terms, beyond ugly.

The 10-year Treasury yield was 1.97%, versus 2.05% on Friday. That was 2.08% on Thursday, 2.13% on Wednesday and 2.20% on Tuesday. The 30-year Treasury yield was 2.68% Monday morning, down from 2.75% on Friday and down from 2.86% last Tuesday. The 30-year was even north of 3% as recently as July 22.

S&P 500 futures were down 85 points and the DJIA futures were down close to 700 points.

iShares 20+ Year Treasury Bond (NYSEMKT: TLT) was indicated to open up 0.75% at $127.35, against a 52-week range of $112.73 to $138.50.

The SPDR S&P 500 ETF (NYSEMKT: SPY) was indicated down 4% to $189.66, versus a 52-week range of $181.92 to $213.78.

The SPDR Dow Jones Industrial Average ETF (NYSEMKT: DIA) was down 4.1% at $157.60, against a 52-week range of $158.27 to $183.35.

The PowerShares QQQ Trust (NASDAQ: QQQ) was indicated down 5.3% at $96.94, against a 52-week range of $90.24 to $114.39.

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