"It is the inverse of Keynes, where there is no consideration at all except for the long run and how some unknowable magic combination of policies will surely make it such a happy and prosperous place – even though none so far have come close."
The Fed tightens on Wednesday and bonds rally. What the hay? GaveKal, Jeff Gundlach, and Jim Bianco nailed it in that every spec and their mother are/were short 10-year Treasuries. But this is only a small part of the story: The global bond markets are broken. There are no signals, there is no noise. Trying to infer any sense of economic or financial information from bond yields is futile.
"In the movie he was portrayed as the moral compass. After hearing his praise for the awesome job Paulson did by saving the criminal Wall Street banks with taxpayer money, I think the justice and righteousness stuff is overdone. Earlier in his talk he said banks existed to “fuck you” – his exact words. Then later he says we had to save them or the world would have ended."
"Accelerated Fed rate hikes will cause tremors in the Treasury bond markets, forcing rates up, most especially in the 2 year – just like 1994. But as yet another central bank-inspired global recession unfolds, I believe US 10y bond yields will ultimately converge with Japanese and European yields well below zero"
What Geithner is unwilling to say is what's obvious: now that policymakers have shot their wad and the room for maneuver is limited, there can't be a centralized, painless "fix" for the next inevitable financial crisis.
Yellen, like notorious previous Fed chiefs including Strong, Martin, and Greenspan, can now claim success in having prolonged and strengthened an asset price inflation which otherwise may well have been about to enter its severe end phase. If history is any guide, the result of that success is to be feared.
"Dear President Trump, can you stand up to the orthodoxy that’s robbed the business cycle of its very cyclicality? Are you man enough to populate the Fed with leaders who are so strong there’s no need to audit the out-of-control institution?"