Commentary on bonds, the Bank of Japan gives in, what the Romney-Santorum battle says about religion, capitalism’s myths, and free trade talks with Japan.

The bond market may get your attention for the wrong reasons.

Fidelity -- Time to sell or hold on?
There’s been a lot of positive news, but tail risks from Greece, China, and Iran still loom.

Quote worth noting.

“As for Treasuries, it is interesting that yields have not risen in line with the CESI in recent months. According to this indicator, the 10-year note should be at 5%! In my view, this raises the question as to whether long-term Treasuries are overvalued relative to the economy’s strength.”

Related.

Telegraph -- Stock markets show there are signs of optimism amid the gloom
Reasons abound for continued gloom about the world economy – the apparently intractable eurozone crisis, extreme imbalances at the heart of the Chinese economy, the possibility of another oil price shock, I could go on – but for the moment at least, they don't seem to be worrying stock markets.

After 20 years of claiming that deflation was structural (ie. not a monetary issue) the Bank of Japan gives in and follows their central bank cousins into the world of unorthodox monetary ease.

Financial Times -- Japan’s policy will spur high debt economies
Has the last samurai of the hard money clan finally hung up his sword? That’s the way it looks.

Ironic that Romney has kept his religious beliefs in a box while Santorum has led with his, and is winning with the conservative Republican base.

Washington Post -- Santorum and Romney are miscast as candidates
The Midwest begins on the western slopes of the Allegheny Mountains, around Rick Santorum’s Pittsburgh, birthplace of the Ohio River, the original highway into the Midwest.

Related.

Guardian -- Americas Clash of Civilisations
If Santorum is nominated, we will get an almighty, but perhaps welcome referendum on the kind of country we want to live in.

Related.

New York Times – Rick’s Religious Fanaticism
Rick Santorum has been called a latter-day Savonarola.

Rick’s got this right. (ed’s note -- he meant ‘unequal outcomes’ but what about equality of opporutunity).

New York Times -- Santorum’s Gospel of Inequality
Santorum Praises Income Inequality.

Quote worth quoting.

“I’m not about equality of result when it comes to income inequality. There is income inequality in America. There always has been and, hopefully, and I do say that, there always will be.”

Three myths about capitalism. (ed’s note – we prefer the word the ‘market’)

youtube -- Top Three Common Myths of Capitalism
Is being pro-business and pro-capitalism the same? Does capitalism generate an unfair distribution of income? Was capitalism responsible for the most recent financial crisis?

Related.

CEF – Moral Hazard
Why bailing out businesses and individuals is killing our economy and the incentives that need to change to avoid this moral hazard.

The free trade talks with Japan.

National Post -- Conservatives see Japan’s massive economy as prize in trade talks
Prime Minister Stephen Harper is expected to announce the launch of free trade negotiations with Japan, as well as an easing of the ban on Canadian beef exports, when he heads to Asia for a security summit next month.