This is becoming a truly fascinating scenario. We now how have the Fed starting to be pushed into a corner: increase QE and see the dollar fall, or let yields rise to levels that could be quite anti-stimulative. Any thoughts here?

30 year and 10 year have no technical support until a few points down.

It feels like a little mini-run on the dollar. By next week at this rate, the 30 year mortgage should be cheaper than the 30 year treasury (on a yield basis of course).

It's nuts. Crazy action today. I agree it is dangerous here, but I mean, I am pretty sure we are not going to see a US credit outlook revision. Maybe this will drive people who were waiting to refi to jump in... We can create a huge amount of paper and then sell it to the TALF or something. I opened a very small short position on the TBT at about 3:30.

Well said jakedeez.
Keep on sharing.