06/13/2012 07:57 am ET

Beware The Bond Market's Warning: Seven And A Half Things To Know

Thing One: Bond Market Warning: James Carville once said he wanted to be reincarnated as the bond market because of the power it had. The bond market doesn't run the country the way it did then, but it still has the power to predict the future. And it's telling us we'd better watch out.

Yesterday the goofball U.S. stock market exploded higher, mainly because Chicago Federal Reserve President Charles Evans, already well known as a fan of stimulating the economy, said for the thousandth time that he wanted to stimulate the economy. The stimulus-addicted stock market's Pavlovian response kicked in, erasing all of the big losses it had suffered on Monday when investors were worried about the implications of the Spanish bank bailout, which everybody now agrees made Spain's problems worse, not better.

But as stocks were celebrating, the bond market was telling a darker story. Spanish borrowing costs soared, the Wall Street Journal notes, with 10-year Spanish bond yields crossing 6.8 percent. Italian bond yields rose, too. Italy borrowed a bunch of money this morning at a significantly higher interest rate than it did just a month ago, Bloomberg notes. Meanwhile, Greeks are pulling money out of Greek banks ahead of this weekend's election, bracing for a possible eurozone exit, Reuters writes.

The bond market is suggesting that things are going to get much worse in Europe before they get better. That means the risk of another Lehman Brothers-like episode keeps growing. Time and time again, when the bond market and stock market tell starkly different stories, the bond market turns out to be right.

Thing Two: Cloudy Dimon: America's greatest banker, Jamie Dimon, deigns to appear today before the Senate Banking Committee to discuss his bank's loss of $3 billion and counting in the credit-derivatives market. According to various takes on his prepared remarks, Dimon will admit that mistakes were made, but that a few billion dollars lost between bankers and shareholders is no big whoop, no need to get all crazy with the Volcker Rule or Glass-Steagall or anything like that. But Peter Eavis of The New York Times writes that Dimon's testimony raises more questions than it answers about the trades that caused the losses.

Thing Three: You Can't Spell 'Laundering' Without "ING:" Dutch bank ING agreed to pay a record $619 million fine for moving money through the U.S. on behalf of Cuban and Iranian clients, in violation of U.S. sanctions. CNNMoney writes: "ING, which had previously disclosed the investigation, said it has taken various steps to "strengthen global compliance risk management," and has since closed its representative office in Cuba."

Thing Four: Iranian Oil Exports Plunge: Economic sanctions against Iran, meanwhile, have driven that country's oil exports down by 40 percent from the start of the year, according to a report by the International Energy Agency, Reuters writes: "On Monday the U.S. government, which aims to choke off Tehran's oil revenue and force a halt to nuclear development it believes is aimed at making weapons, said India, South Korea, Japan and Turkey have made significant cuts to oil imports from Iran."

Thing Five: No Cat Videos For You! The Justice Department is thinking about bringing an antitrust case against cable providers, who might or might not be conspiring to keep you from watching as many videos on the Internets as you want to, the Wall Street Journal reports: "The Justice Department probe highlights how the shifts in decades-old patterns of television viewing are shaking the tightly regulated industry. Decisions in Washington could play a role in determining how quickly the new video services spread and what form they take."

Thing Six: On The Verizon: Verizon Wireless announced on Tuesday that it was going to give customers the option of sharing a data plan across many devices, which sounds awesome until you look at the fine print, the Wall Street Journal writes: "The approach could save heavy users money as they attach phones, tablets and laptops to Verizon's network. But it also does away with the carrier's cheapest plans for new smartphone customers and pressures subscribers to give up their unlimited data packages when they upgrade to new phones."

Thing Seven: Insurers Changing Their Ways, Maybe: Even if President Obama's health-care reform law is struck down by the Supreme Court, health insurance companies have already changed their ways as a result of the law, Aetna's CEO tells the Wall Street Journal: "If the Affordable Care Act were to go away tomorrow, we still would be better off as an organization, because who can argue with getting a lower health-care delivery cost, more streamlined administrative structure, making yourself simpler and less complex to do business with?"

Thing Seven And One Half: Something In The Way: In a piece that could only have been written by someone living in New York, where people are constantly, unceasingly getting in the way, Cracked does us the public service of listing the "7 People Who Need To Get Out Of The Freaking Way," including elevator-door standers, big-backpack wearers and people who "just want to get in here real quick."

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Calendar Du Jour:

Economic Data:

8:30 a.m. ET: Retail Sales for May

8:30 a.m. ET: Producer Price Index for May

Corporate Earnings:


Heard On The Tweets:

@zerohedge: But, but, all these journalists were saying on Saturday that the Spanish bailout is an epic success

@BCAppelbaum: Today is one of those days I'm especially grateful to all of my ancestors who left Europe.

@jameschappers: George Osborne tells Times summit Greek exit from euro may be necessary for Germany to persuade voters to pay to save currency. Incendiary

@EddyElfenbein: "Financial astrologer charts stock market's course" Laugh, but it's no worse than a lot of other methods

@ReformedBroker: The 9 people and 27 machines that trade stocks decided to buy more than sell today. Don't go writing a book report about it.

-- Calendar and tweets rounded up by Khadeeja Safdar.

And you can follow us on Twitter, too: @markgongloff and @byKhadeeja