This column has been trying to make sense of the apparent disconnect between the fear on display in the bond market and the high levels of the S&P 500 for months. August seems to have severed the ties between stocks and bonds almost entirely, with long-dated bonds metaphorically screaming in panic, while the S&P lost less than 2%.
Under the surface there is a slightly better link. Bondlike stocks are doing well, while the most economically exposed stocks underperformed. Winners include the utilities, real estate and…