US 10-Year Note Yield Chart

This is an interesting chart to compare with the Japan 10-Year Bond Yield Chart I posted a few weeks ago. What are low interest rates good for? I guess people can now take advantage of cheap loans to buy houses, cars, and other big-ticket stuff.

Homeowners can also choose to "cash out" when they refinance at lower rates and use that money to pay off their credit card debt, thus "deleveraging" themselves. They could also remodel their kitchens or go on vacation or whatever. That's good for the economy, right? That's the kind of activity the Fed wants to stimulate.

Where it gets sticky I guess is when people take advantage of the "cash out" and cheap margin loans to buy more financial assets, i.e. stocks and bonds. That's not very productive, is it? The stock market is richly valued and yet buyers keep pouring in... there just seems to be a huge amount of speculative buying now.

US Broker's Call Rate

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