2-Year Greek Bond Yields 50%, 10-Year Treasury Yields 1.93% (Both At Records)

2-year Greek Government Bonds yield 50% which is a record high. Is it pricing in a default? The cost of insurance on 5Y Greek debt is testing the July highs at 2,500 bps (Greek 5Y CDS). The 10-year U.S. Treasury Note yield is at 1.93% which is a record low. See my previous post on 8/15/2011: "10 Year Treasury Note Yield Near 1941, 2008 Lows (1.95%, 2.04%)". Investors are rushing into Treasury bonds as a safe haven to hedge against recessions and euro-zone default risk, unless there's a war coming somewhere. This UBS report at Zero Hedge probably has the answers: "Bring Out Your Dead - UBS Quantifies Costs Of Euro Break Up, Warns Of Collapse Of Banking System And Civil War". Watch gold and the U.S. Dollar. Is China going to save the euro-zone and European banks?

3-year chart of 2-year GGB Yield (courtesy of Bloomberg.com)

 

Intraday chart of 10-year UST Yield (Courtesy of Bloomberg)