The hue and cry from the "protectors" of citizen's rights to "Audit the Fed" is trending faster than NPH in tighty-whitey's. Here's a better idea - Mute the Fed and reboot the concepts of consequence and loss to the capital structure.
I received an email from an old friend and mentor the other day that was a stream of consciousness series of questions. Most, I and he, had long ago formulated the answers to. One, stood out in the "choir-preaching" however: When did the divorce between faulty thinking/poor decision making and negative consequences take place? The answer, in my mind, is shortly after the Fed decided to tell you what they were doing.
The Fed Chair is now just the Mayor of Lake Wobegon, were everyone wins and all the market participants are above average. The near month long retreat in bond prices is only the latest example. After spending the first month of the year listening to a Whitman's Sampler of convoluted and hack reasons for owning long dated securities, the 3 week (and longest since Taper Tantrum) slip has - we are to believe - harmed no one. I have one word to interject : CHALLENGE.
Maybe, just maybe, what Ms Yellen was trying to say today - in between the moronic "Audit" theme - was someday soon market participants will need to think for themselves again. That the concept of price discovery will provide policy makers with needed feedback on the state of the world. That you, young Titan of the Universe, will be introduced for the first time in your vaulted career to a little ditty called LOSS.