Treasury investors are frequently described as being smarter than equity investors because treasuries and generally good leading indicators i.e. the price or yield on treasuries can sometimes be used to predict future economic activity, or at least the trend thereof.
When the economic outlook appears to be bleak or risky, some investors "flee" to treasuries, which are essentially guaranteed loans to the government. This is called a "flight to safety", because the risk of losing money (in nominal terms, at least) is lower in treasuries than in equities or other investments.
However, one must be reminded of the "chicken and the egg" problem. As there is a flight of capital to "safe" treasuries, less investment and venture capital is then available to functioning business and those wanting to start new business. More businesses will therefore fail, and many new businesses will never get started.
So, at least some of the weakened economy must due to this flight to capital.
If you ask me, the US government should not be allowed to issue treasuries... With over $14.5 Trillion current outstanding debt, the government have borrowed enough (on our behalf) and has absolutely no business borrowing any more!
Eliminate treasuries and free up some capital for those that will use it more wisely!