This article discusses how long-term treasury yields are at 220 year lows. It is amazing to see the level of fear and hysteria that these low interest rate implies. I believe the U.S. government should be issuing 100 year bonds to take advantage of these fears. I don’t think these rates could happen if it weren’t for the short term mentality that most market participants take. Because people are trying to make money in the next week or next month, they aren’t thinking about the longer term ramifications, and the odds that an investment will be disastrous. Mr. Market is saying that you can buy Citigroup and Bank of America at 50% of tangible book value, yet that same market is saying that for a “low risk” 10-yr treasury you will only obtain 1.53% per annum with no adjustment for inflation. It doesn’t make sense but this is why investors shouldn’t let the market dictate their feelings on investments, but instead should look at the individual merit of the investments themselves. This is how the most successful investors make money over time, but it requires patience, confidence, and the acceptance of periods of underperformance that can of course be very frustrating during those times.
http://www.businessweek.com/articles/2012-05-31/yielding-to-panic?r=read