Straight Dope has a detailed discussion of how yellow became associated with cowardice. It is speculated that the source was the medieval medicine theory that the four body fluids were blood, phlegm, black bile, and yellow bile. Yellow bile was said to make you peevish, choleric, or irascible. The color yellow was subsequently used to mark the doors of the homes of French traitors. Victims of the Spanish inquisition had to wear yellow, and Nazis used a yellow star to designate that a person or business was Jewish. A yellow flag was used to quarantine victims of yellow fever. “Yellow journalism” dates from about 1895 and was and is used to describe news using sensational headlines and articles to inspire fear.