The New Neutral

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Pimco is hyping a concept they call the "New Neutral." Its a petty ego fight hangover from the El-Erian days and "The New Normal." But, if you go back to last year at this time, we were arguing that without LSAPs the Fed policy calibration would be in equilibrium...or neutral.

We were, at the time, going from short to long and getting absolutely crushed by the deluge of sellers. June 2013 turned out to be our worst month of the year. Now, people are charging into Bonds, Notes and products like the one above under the New Neutral" banner.

Color me skeptical, but this looks like the polar climax of the taper caper from last year.

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