Tm, "falling yields (and therefore rising bond prices) can precipitate a drop in equities, viewed as the classic flight to safety (as bonds are safer so investors rush in pushing prices up)."
so you could say that the divergence of 10y bonds and the S&P 500 should precipitate a strong drop in equities. (Strong because it looks like the S&P has been defying gravity since early April).
?
If so I wonder why? What causes a situation like this? Why have US bond yields been dropping?
10y @ 2.45%, 3 month at .04% and not having graphing assets to produce a graph but the spread includes inflation and economic activity in the US?
As you said the figures may not work in a ZIRP environment.
