Reflecting very "easy" credit that is integral to every great bubble, real long interest rates have declined until speculation fails. As shown on the following page of charts, some of the declines have been huge.
Soaring real rates is one of the features of a post-bubble contraction, and is accomplished by falling prices and earnings power that impairs the ability to service debt.
A revulsion for most corporate debt soon encompasses long-dated treasuries such that nominal yields increase as the rate of CPI inflation declines.
In each case, the shock to the markets and policy makers was sufficient to end a generation's abuse of credit.
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