ITS A 2 HANDLE!

The ten year yield this morning is back under 3% for the first time since we came out of the crisis in 2008. The 2 year yield is at a record low of 0.62%. This is not a good sign in my view about the overall economy. It is sending a signal and its a deflationary spiral that could get out of control if we're not careful. Okay maybe im being a little extreme here but face it folks. Look at stock prices overall, commodities prices overall, are going down....the dollar is strengthening. Or maybe this is the end of quarter pile on that i believe began late last week and has perhaps another day or 2 to go. Either way this morning there is pressure that is coming from Europe sending down futures down over 100 and under 10k pre open. MLPS are part of the pile on and continue to strongly outperform the overall market. At some point this may get undone and in a big hurry.

Look at the chart above and notice that the yield on the 10 year has dropped 20% in the last 3 monts (from 4 to 3%) and this has come with a drop in stock prices and a gain in mlp prices. Money continues to move toward the attractive yield and tax advantages that mlps offer.


That move has accellerated since last Thursday and its from this that i lay my argument that the end of quarter is playing big in here and that this spread wont last for ever. Either markets will turn and rally come the new quarter or mlps will unwind this gain to some degree. Place your bets people.

Nothing on the corporate side this morning that will drive individual mlps and nothing on the upgrade downgrade list. It will be interesting to see what happens today after the hard down open if mlps will turn and move higher and continue the outperformance. 2.98 is the latest print on the 10 year.

Got this link emailed to me yesterday about taxes and mlps. Its an interesting read. Im not sure what to make of it really. Yes MLPS have a tax advanatge but my response to all of this is that there is nothing stopping anyone from investing in these companies and participating in the same tax advantage. DUH!