Bonds obviously can't go straight up forever. But a turn in this market won't mean an epic bloodbath.

Government bond prices have gone parabolic. The yield on the 10-year Treasury bond tumbled to 2.54%, down from 2.99% three weeks ago, and yields on bonds issued by other big governments plunged as well. Ten-year bonds are now yielding 0.93% in Japan, 2.27% in Germany and 2.97% in the U.K.

Lower highs, lower lows?

Bonds issued by rich-country governments aren't the only highfliers, either. Corporate bond prices have soared as well and big companies have cashed in, with IBM (IBM) this month selling $1.5 billion of three-year bonds that yield just 1%.

"There is a mania for bonds right now," said Joseph Calhoun, who runs the Alhambra...