Do You Have Market Whiplash Yet?

What goes down 600 points one day, rises 400 the next, then falls 500, only to jump 200 on the fourth day? Answer: the Dow Jones Industrial Average, of course. I'm no expert on stocks except to offer this advice: buy low, sell high. The grand irony of all this is that after Standard & Poor's dinged the U.S. credit rating investors swarmed into Treasuries, sending the yield on the 10-year bond to a new low: 2.1%. For many mortgage bankers this has been manna from heaven. As our reports have shown, applications are booming. (See our website today, and the Monday roundup in the weekly version of National Mortgage News.) But one thing has been bothering me about the rush into Treasuries. Many U.S. corporations have been hitting the ball out of the park on 2Q earnings and it can be argued the Dow 30 has a better (combined) balance sheet than Uncle Sam. So why do investors keep buying 10-year Treasuries? Answer: When push comes to shove, Uncle will never default on its debts.