The absurdity of panic: Investors flocked to the downgraded T-bills –

The yield on the benchmark 10-year U.S. Treasury fell to 2.34% from 2.56% late Friday. That is almost a 10% decline in the interest the Treasury pays.

“The Treasury market seems to be oblivious to the fact the U.S.’ credit rating was downgraded,” said Quincy Krosby, market strategist with Prudential Financial.

In other words, the issues directly affected by the downgrade became the niches of safety for the investors. What this fact says is that the panic today was just that and the stock market will level off as soon as soon as there is a bit of sobriety injected into the stock-holders.

Nonetheless, the fears of the investors would be based in reality if either the U.S. slides back into recession (it actually feels recession) or Italy, too large to rescue, fails.

The German magazine, Spiegel, has a pessimistic long-term outlook:,1518,779008,00.html

If Europe has an indebtedness problem, we have both that and a political/structural crisis. The two parties in Washington have brought the country to a standstill. The tea party was the devil’s catalyst at the critical moment, with its irrational posture in congress. And almost everybody else bowed to their demands.

The magnitude of this crisis humbles me. It is even difficult to write about my candidacy for governor of New Jersey at this moment. We certainly have a deficit in leadership at almost every level of government.