after today I got a strange feeling. recently there is understandably almost perfect correlation between rates and equities - when equities sell-off treasuries are getting bid. there are 2 main avenues what this could mean: A. we are heading for armagedon, i.e. economy down, fed cuts cuts cuts, inflation up etc. B. equities sell of because they do NOT expect fed to cut - treasuries (as for most of the past 3 years) misinterpret it as an economic weakness and get bid. it is interesting to note that in B. treasuries' misinterpretation is in fact feeding more equity selling because more and more people think that A. may be the correct status quo. please feel free to vote and put some comments as well.