Cannot be more insane as this one is!

 Can anyone tell me what is this all about in the chart below? This market has indeed lost all its mind and is as insane as it can be! While as the old adage goes: "The market can stay irrational longer than you can stay solvent", eventually it will come back to bite you if you are also acting irrationally.

 

If you still don’t understand what I’m talking about, here it is. Last week, the unthinkable happened. The yield on Greek government 5 year debt fell below 5 year US Treasury debt. Greek yields reached 2.174%, while US notes were 2.294%. The bond yield is basically the risk what the creditor is willing to take. Just like mortgage loan, you will get lower loan interest if your credit score is high, meaning safer financially for the creditor; or higher loan rate if your credit is lower due to more risk for the creditor to lend you money. So the bond yield for government debts is a reflection of the safety bond investors think about the country’s economy and finance. If their economy is doing poorly, the government may not be able to pay back the debts. It is as simple as that.  In other words, with all of Greece's economic troubles ongoing, the market views its debt as safer than US Treasury notes of the same maturity. Regardless how you slice it, there is no rationality to even think about a safer Greece than the US economically but the market is trading it that way for now. Totally Absurd! That’s the only word I can think about when I saw it.

 

This is one aspect that I can show you how irrational the market is at the moment. If you dance with it, just don’t forget to watch your steps below. The rug can be pulled out suddenly when you feel very safe following the steps with the market. The market is very good at this to trick and fool you. Just be aware of this!