Stories about the death of the bond market have been circulating since 1992. Every one of them has been wrong.

Deflationary Period Over?

At Mauldin's latest conference, Gavekal's Louis-Vincent Gave stated "The deflationary period we've been in has come to an end."

He produced this chart.

As told through the words of Steve Blumenthal ... Louis-Vincent continued, "Or simply look at this (next) chart. I mean this is obviously the 30-year US Treasury bond yield, which is now, of course, broken out decisively from its downtrend, which makes sense if this deflationary environment that I've described is now coming to an end. And here, I just want to spend a quick second on this because I think this is very important. The markets today are giving us a very important signal.

Crayon Shortage

There appears to be a shortage of crayons.

Gave need a fatter crayon, a longer crayon, or better vision.

My chart shows the 30-year long-bond has not broken its trendline. Perhaps it will, but it hasn't. Until it does, the alleged "signal" is as valid as the ones in 1990, 1994, 2000, and 2007.

Don't Jump the Gun

We have not seen a secular change yet. It's very tempting now, just as it was in 2007, to jump the gun.

Don't do it!

Hoisington Management

Lacy Hunt at Hoisington Management is one person who has not jumped the gun.