This morning the arguing between Rick Santelli and Steve Liesman around the data release actually got us thinking. The data may have been distorted by the calender but most players know what day it is. Conversely, Rick argued that he "didn't believe in policy" he believed in "markets." Yet, his point was that the prices evident in the market today were "wrong." Bond prices would "one day" overwhelm the Fed and crash to a lower - more natural and correct I assume - place.
The question is why are today's prices wrong and some future possibility event's prices accurate? We have opinions about things but the price tells you if you're right or not. There's an old adage "a fine line between early and wrong" - that line is your margin clerk. No matter what you think of the Fed or asset prices, settlement is what you get. A trader can't go-all-Linus and wait in the patch for the Great Pumpkin. Everyone else is out trick or treating, even if some are getting rocks.
As we've said before, monetary regimes are different. Global monetary regimes are downright wild. Trade the market in front of you. If you don't like the CBs in the market, play elsewhere. EZ bond markets didn't implode because the ECB was doing too much. The ECB did too little and then, with money supply collapsing, raised rates. I don't know how interest rate markets will hold up here if similar actions took place. What I do know is, it's not happening and Linus is starting to look foolish.