Thank you Greece!

And Americans thought it was just a Hollywood movie (sic)..... As Greece plunged further into chaos today brought on by the socialist and union movements demanding their fair share(?) and striking of all things (no one mentioned they dont have any money left), the world investors have taken note. With the EU teetering on collapse from exposure to the debacle, we have seen a massive swing in flight to safety. Already Greece's sovereign debt needs to be bailed out, and like dominos, the rest of Europe seems poised to fall as well.

The U.S. Treasury market is seeing a renaissance of sorts. Currently the yields on the 10 Yr bond have fallen to 3.5%(at the start of April they were at 4%)!! Not long ago, traders were remarking that with the exit of the the FED from Mortgage Backed Securities Bond market, it would be inevitable to see rising interest rates. Not the case! The fact that a unionized country like Greece would default was never in the books. What a headline! It would seem that the implicit guarantee of the U.S. government to back their own debt has brought the investors rushing for a slice of safety. The dilemma in Greece has the propensity to spill into their neighboring countries as well. Already Greek Unions are striking in Athens and burning buildings with live people inside...this is not good for them or the E.U., but it definately bodes for interest in U.S. Treasury's. The problems of civil unrest in Greece will only exacerbate the situation in the coming days. Granted the gains will probably be short lived, but currently we are seeing the highs of the market since the start of the year! It may not be politically correct to say this, but if you are in the mortgage market right now....."LOCK and load"! Stay tuned.