Interesting day. Not a whole bunch of news, but what I saw looks like it might mean more than it seems.

First, we have 10-year treasuries spiking, because bond investors believe that the economy will not be recovering this year.

We may also have S&P warning of a lending bubble in China, with the possibility of a “sharp deterioration in banks’ assets,” over the next few months as a result.

I think that if the bond market is right, and that is a big if, then the expansion of lending in China does have a real possibility of a significant hang-over in the next few months.

It does seem that pessimism is ruling energy and currency too, with retail gasoline having its biggest 2 week drop since the end of last year, and crude oil closing at a 2 month low.

Additionally, demand for a safe haven has driven the dollar higher.