We discussed the issue of what a bubble in US Treasuries would mean a while ago here on Finance Monitor, but it seems that this is becoming a more popular subject. Take this MSNBC story for instance. Many of the same arguments that we have made here appear in the article which, among others, include the argument that dividend yields on high quality, consistent earning stocks are currently higher than treasury rates even before the possibility of capital appreciation.
For our earlier discussion on the matter, look here. Since the writing of that piece, yields have fallen nearly another 70 basis points.
One point I would like to make here is that bubbles in credit markets are more difficult to assess than they are in equity markets and real estate markets. Generally, I would say that if there is very robust issuance with not the slightest pressure on interest rates, that might be a sign that investors are too complacent with credit conditions. As of right now, I think bonds may be due for a serious correction, though it is uncertain how severely overvalued bonds are. So far it hasn't happened yet, despite my (and several others') repeated concerns.
Keep your eyes peeled on this one.