The dollar index is trading around the mid 2008 level. The US 2 year note (and T Bill market) has not moved since August of last year. The combination of chaotic volatility in most asset classes and vaporizing sovereign debt markets abroad have kept US yield structures low and perception of safety high. The fine line between "stable" and "dead" should come into focus now. The latter option may turn out to be accurate but is over subscribed given present inputs in our opinion.
We look toward sessions ahead where arcade player frustration rises and glacial relative value concepts dominate. The US political situation continues to impede economic progress. A national re-fi program - a plan we advocated 6 months ago - is supported by a recent Fed White Paper but will meet heated opposition. This week, Hungary vaporized and Greek -insert euphemism for default here - is on deck. The Stability is coming. The question is will it work?