Incredible to see any ratios matching the 2008 levels, but as Treasury Yields have plunged to record lows this shouldn't be much of a surprise.
Considering the stock market remains considerably above the March 2009 lows, the ratio of the S&P 500 dividend yield to the 10-year Treasury Yield shouldn't be this high. Companies continue to raise dividends and no signs of a crisis exist outside a few banks and countries in Europe. Why all the panic?
The news from Greece and even Spain shouldn't be shocking by now. American banks are all much more comfortably capitalized and prepared for a crisis. Maybe the bond market is correct as usual, but this level of fear is clearly off the charts again. Last time though it came from a near collapse. This time it is just the fear of the collapse that has pushed the ratio up.
Below courtesy of Jack Hough's SmartMoney.com blog:
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