Observation ‘o the day

by digby

A week ago, before the S&P downgrade, the interest rate on US 10-year bonds was 2.56 percent. As I write this, it’s 2.24 percent, with the yield on inflation-protected bonds actually negative.

You would think this would amount to strong evidence that the downgrade totally failed to shake confidence in US debt.

Yet people who listen to radio and TV reporting tell me that most stories attribute the stock plunge to the downgrade, and are telling listeners that the case for immediate spending cuts has gotten even stronger.

I heard this on talk radio yesterday. Stock are volatile because of the S&P downgrade and that means “the market” is demanding more human sacrifices.

One of the things I’ve come to bank on in the last few month is the opportunism of the austerity addicts. They are brilliant at spinning each event to their own advantage.

And many members of the press, as usual, are more than willing to buy the storyline.