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Too little too late

February 10, 2012

There are worries that the end of Operation Twist, scheduled for this summer, could introduce volatility and catch the legions of investors in 30-year bonds off guard.

“If the Fed ends the Twist ‘cold turkey’ at the end of June,” asks Ward McCarthy, chief financial economist at Jefferies & Co., “will long-term rates snap higher? Policy makers will start to think about this before the end of June.”

From: The Wall Street Journal

This is hysterical! Of course, I find many things hysterical with our Fed policy these days… hysterically sad. I wrote an article a while ago that made the very points in this article. The question I raised at the time centered on how institutional investors were supposed to invest in an extremely manipulated financial market. 

Now we have experts telling us the Fed will need to think about how to unwind themselves from the very policies they have stuck investors with. Just one question about this point: Why didn’t they ask these questions the beginning? By June it will be way, way too late. It is already too late right now!

I would like those who have done all this unprecedented manipulation to tell us how institutional pension investors are supposed to invest with any confidence of safe and reasonable returns when they are artificially lowering interest rates to force investors out of the traditional safe havens.

“They need to think about this before the end of June.” No, absolutely not! They needed to think about it before they ever implemented their DOA plans! The Fed’s monetary policy has only spread Wall Street’s collapse to Main Street.

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