Just listened to Credit Suisse’s director of U.S. fixed income policy explain how their short treasury position (betting on a price drop) didn’t pan out this morning – as they guessed wrong in terms of what Bernanke would commit to in his Jackson Hole speech. Now it’s one thing to speculate, conversationally, on the moves of any given policymaker (or committee) – left to his (their) own biases – it’s another altogether to risk other people’s money based on such subjectiveness.
The articulate young man described what he had expected, why now he believes he didn’t get it, and when asked if Bernanke would be swayed by pressure from politicians, he said “look, politicians make decisions for the good of the country” and (I think) went on to say something about the Fed’s motives. After he made his remark regarding politicians, some chemical reaction in my brain entirely thwarted my ability to listen further or to give the slightest modicum of credence to anything this young speculator had to say. I would wager that this thirty-something “genius”, rather than being the victim of extreme na