Wednesday, February 24, 2010
So, how do we Square Bernanke's comments?
The Fed will lose all credibility [to answer the quote by Captain Obvious in the previous post] if the bond breaks down (rates break out to the upside). Here is the long bond proxy, TLT benefiting due to the stock market's weakness yesterday and Bernanke's jawbone today.
People looking at individual stocks or commodities are really missing the most exciting drama play out in the macro that I can remember. That includes the hysterics of Q4, 2008 which had of course turned out to be the result of the unsustainable policies that many of us had chronicled for years before.