Amazing. Just-four days after the first-ever downgrade of America's sovereign debt rating to AA+ from AAA -- dollar denominated Treasury debt obligations and their mortgage-backed security cousins are enjoying "rock-star" status in the global credit markets.


The current rally in the credit markets in general - and the mortgage market specifically - is being driven singularly by the fact the rest of world - especially Europe -- is coming apart at the financial seams.


Rumors are circulating around the globe that France will soon loose their AAA sovereign debt rating as the debt crisis that began in Greece continues to infect an increasing number of the other 16 countries that share the euro.


Rick Rieder, chief investment officer at BlackRock Inc., succinctly summarized the stunning power behind this week's rally in the Treasury and mortgage-backed securities market when he said, (I'm paraphrasing) "Whether rated AA+ or not, the world still thinks Treasury debt obligations are AAA rated."

The "so what factor" here is significant. As long as the this AAA global perception of dollar denominated assets remains unshaken - and as long as Europe continues to stagger under the shifting strains of what will likely prove to be one of history's most crippling sovereign debt crisis - the support mechanism for extraordinarily low mortgage interest rates will almost certainly remain in place. If additional reasons develop for the global investment community to question America's ability to repay her debts in a timely manner -- the trend trajectory of mortgage interest rates will undoubtedly reverse course in the blink of an eye. But that is a worry for another day.