More evidence that treasuries are becoming overvalued....

Hat Tip to The Big Picture/Bloomberg for illustrating where we are at in terms of treasuries and stocks.


These are Barry's thoughts not mine (but I concur with most of them)
1) After a 47% freefall, Stocks have gotten relatively cheap, at least on the basis of this one metric;
2) Yields are unusually low, thanks to Fed rate cutting and a flight to safety (i.e., US Treasuries);
3) Despite the earnings carnage in the financial sector, there are many well run companies selling goods and services profitibly.
4) You can fake earnings through accounting hankypanky — but you cannot fake dividends.
5) My only caveat — if the recession is far deeper and more prolonged than even the most pessimistic forecast is for, some dividends may end up getting cut.

I am going to start nibbling at TBT but I still think 10 & 20 year yields will get pushed down some more on account of the ongoing "flight to safety" but in 2009 TBT will be a home run pick.