Selected News, bond yields, deflation and economy ...

Happened to read an article from a columnist in FT yesterday, It was about the negative returns for the US Treasury Inflation Protected securities,(TIPS). The whole point was who would be buying securities that are protected for inflations with negative "real" returns. A standard definition of TIPS would give this:
" TIPS are bonds issued by the US Government that guaranty you a fixed return (usually around 2%) PLUS whatever inflation (CPI) turns out to be each year. These bonds are one of the safest investments you can make because there is very little or no credit risk (issued by the US government), liquidity risk (TIPS are heavily traded), or inflation risk. These TIPS bonds adjust their principal value and payout twice a year to compensate for any inflation"
Along with this, the few of virtues of buys TIPS, include protection from inflation, and deflation, along with offering real yield diversification. But is this a real problem for investors? I think it is. the simple explanation for this is the fallacy involved in selling the TIPS. Even though inflation protected securities are marketed and widely seen as a tool against adverse inflation movements(from the point of hedging the inflation risk), it actually offers pretty much less fortification against deflation. Maybe this quote can explain it in a better way.
"Deflation remains a larger risk as long as interest rates remain near zero, the firm said. Although investors in conventional Treasuries are "protected" by the zero bound on nominal yields, investors in TIPS are exposed to a bit more risk due to the cash flows of such bonds declining in tune with deflation."
So the risk associated with TIPS isn't exactly related to deflation but rather sublimed due to the declining cash flows.
The events triggered by the TIPS saga has precipitated the movement of banks towards mortgage bonds over Treasuries for the prospect of higher yields.

I was thinking to write something about the economy this week, but it(the news) is full of usual stuff, Job losses, fears of deflation, and so on. I would prefer not to discuss the job losses figures, especially at a time, when I am hunting for a job!