Oh it’s topsy turvy world. Treasury bonds closed today within spitting distance of all time highs set last August. The mainstream financial media, preferring to sell stocks, downplay this feat by talking about low yields, but price is inverse to yield. When stock prices rise, they could just as easily say stock yields fell (but they won’t because it sounds negative). Yes folks, as stock prices have fallen back from their own recent record highs (raising yields!) bond prices are knocking on the door of their own. The Treasury bond index fund GOVT hit $26.60 today, pennies short of it’s high of $26.69 on August 28. The long bond fund TLT touched $145.99, just short of its record of $148.90.  You won’t hear this on CNBC, but as I noted in Outlook for the 2020s, long term Treasuries have so far outperformed stocks this century.

This is no mean feat, given that those August highs represented the lowest interest rates in all of human history. Fed Chair Jerome Powell noted Wednesday that while financial asset valuations seemed “somewhat elevated”, he didn’t see any destabilizing imbalances.  To say that this is an unusual financial environment doesn’t do it justice. Even “bubble” seems inadequate. One struggles to come up with fitting superlatives. My term of choice … pathological.