At noon Tuesday the yield on the benchmark 10-year Treasury was dropping slightly, settling in at 1.6%. As most any mortgage banker knows, as the 10-year goes, so goes rates. Refinancings continue to hum along thanks to 30-year FRMs that are still being offered at 3.5% (or less) depending on how many basis points are being paid upfront. But what if President Obama and the lame duck Congress cannot come to terms on the ‘fiscal cliff’ issue? Will such an impasse cause rates to dive or spike? It can be argued that tax hikes and budget cuts will result in a better U.S. debt position, therefore making U.S. Treasuries even more appealing -- causing rates to fall even more. Of course, everyone keeps telling us such a move would trigger a recession resulting in higher unemployment – and (you would guess) lower tax revenues to the U.S. Treasury. An increase in jobless Americans would hurt the home buying market, a business that is just now beginning to show signs of life again. Sounds a bit like Greek legend of Tantalus: A king who for his crimes was condemned to hell to stand in water that receded when he tried to drink, and with fruit hanging above him that receded when he reached for it.