Are Ben Bernanke's loose lips the real cause of surging stocks and plunging interest rates?
Here's the backstory: The so-called smart money on Wall Street had it all wrong. "Sell in May, and go away" was the big theme a month ago. Oops. The broad-based S&P 500 has jumped another 2.5 percent to a record high near 1920. Meanwhile, 10-year Treasury rates unexpectedly dropped to less than 2.5 percent. So if the Wall Street pros are honest, they'll admit they've been selling stocks and bonds, not buying them, and therefore got the story all wrong.
And perhaps most surprisingly, the so-called "real" or inflation-protected 10-year TIPS yield also dropped another 25 basis points. Year to date, this key proxy for real economic growth has unexpectedly fallen 56 basis points to a low 0.2 percent. This is an election-year economic warning for Democrats.