Market Data: Week Ending August 16, 2013

Market Index	12/31/ 2012	8/16/ 2013	Week Change	Simple YTD %
Dow Industrials Avg	13,104.14	15,081.47	-2.28%	15.09%
S&P 500	1,426.19	1,655.83	-2.15%	16.10%
Fed Funds Rate	0.09%	0.09%	0.00%	0.00%
10 yr T-note Yld	1.78%	2.84%	0.27%	59.55%
5 yr T-note Yld	0.72%	1.60%	0.24%	122.22%
5 yr TIPS - 'Real' Yld	-1.37%	-0.29%	0.25%	78.83%
Implied 5 yr Inflation %	1.72%	1.89%	-0.01%	9.88%
2 yr T-note Yld	0.25%	0.36%	0.04%	44.00%
2-10 Yr Slope	1.64%	2.48%	0.23%	51.22%
90 day T-bill Yld	0.05%	0.05%	0.00%	0.00%
Gold ($/oz)	$1,664.00	$1,375.50	$62.00	-17.34%
WTI Oil ($/brl)	$91.74	$107.50	$1.58	17.18%
VIX "Worry Index"	18.02	14.37	0.96	-20.26%
Credit Spreads	12/31/ 2012	8/16/ 2013	Week Change	Simple YTD %
Inv Grade Credit Idx	3.36%	4.13%	0.21%	22.92%
High Yield Credit Idx	6.76%	6.46%	0.11%	-4.44%
Markit CDX No Am Inv Grade	96	80	6.67%	-16.67%
Markit CDX No Am HiVol	196	158	0.64%	-19.39%
High Yield to 10 yr T-Note Spread	498	362	-4.23%	-27.31%

Krugman On Interest Rate Spreads

Understanding bond spreads, comparing yield of different bond's, is an art as much as it is a science. As an example, it seems to me that the current narrowing of spreads between Treasury debt and credits is saying that the bond market demands higher Treasury yields. That reflects market recognition of the possibility of a US debt crisis/renegotiation at some time in the future, and signaling inflation forces are genuinely lurking nearby. It seems pretty easy to say that. Paul Krugman puts a different perspective on this in a recent post titled "A Note on the Term Spread". In his post he makes this interesting point...