It's the single most important indicator in the world, and it has probably never been harder to understand, much less forecast.

Ten-year U.S. Treasuries were yielding a spectacularly low 1.97 percent on Wednesday as they moved toward the end of their 30th straight year in a bull market. The 10-year yield has been the keystone of the global financial system, an indicator of the economic outlook, of risk appetite and the yard-stick by which all other risks are measured.

That, at least, is how we've thought of it, but the events of 2011 have illustrated amply that Treasury yields are telling you everything and nothing, all at the same time.

As such, perhaps we can forgive just this once bond king Bill Gross, who was caught out when he made a massive bet earlier this year that Treasuries would suffer when the Fed's bond buying program ended in June.

Despite it all Treasuries have had a stonking year, returning almost 10 percent over all, and 23 percent for long term bonds.

On the surface, the reason was pretty straightforward: Europe. Despite the U.S. being too deeply in debt, unable to get its act together politically and suffering sluggish growth, the world's faith in Treasuries ensured a huge and supportive flow of funds.

That's because, outside of theology, faith is a relative concept, and compared to Europe, whose currency area just may fracture, the U.S. is looking good. In other words, investors are willing to hold Treasuries because everything else looks so risky, even though Treasuries themselves now must carry default risk.

Eoin Treacy's view The crowd is right for a while, sometimes for lengthy periods, evidenced by the many self-feeding trends that markets produce. At such times analytical intellect will be trampled if it stands in the path of a moving crowd.

Behaviourists monitor the crowd even more closely than fundamental 'facts', which can be temporarily irrelevant or even wrong. In markets, certainty of opinion is a conceit. The strongest opinion can also be an attempt to bolster one's own confidence through wishful thinking, or if uttered publicly, to influence others.

The louder and more widely spread a consensus view becomes, the more likely it is to be a contrary indicator. Behaviourally, it tells us far more about what people have already done, rather than what the market will actually do.

An accelerating uptrend is accompanied by a growing consensus and ever bolder forecasts to reassure increasingly nervous participants during what they instinctively sense is a climactic move. Similarly, in an accelerating downtrend, worst-case extrapolations are required to rationalise capitulation selling which is also climactic.

The examples are legion, if we think about it.