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As observed in the AEI piece cited above, the bond market fell as actual default neared. But not as a result of any ratings agency actions.Update at 12:57 p.m. ET. Treasury Bonds Rally:
The Wall Street Journal reports that despite the S&P downgrade, Treasury bonds are still selling briskly and the 10-year yield has fallen o the lowest level since October:The price move underlines the dilemma confronting investors varying from the Chinese central bank to pension funds—there are few alternative safe-haven assets out there that can match the depth and liquidity of the Treasury market, with over $9.3 trillion in debt outstanding.
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