What a difference a day makes.  I guess we should not be surprised in a policy massaged, black box stoked, HFT riddled market that we have.  Here’s TLT bursting upward, seemingly without much fear of inflation (today)…

Here’s TIP-TLT sagging…

The above can be seen as a move toward risk ‘OFF’ (in some ways the opposite of an inflationary asset grab atmosphere) and yet the yield curve is dropping with an implication of risk ‘ON’ with no inflation fears on the declining long end (yields dropping) and money flying out of short term instruments (yields rising, although I believe much of the move was from yesterday, with today’s bias down on the short end as well).  A whacky market.

More and more I come to believe that this market’s signals have been so well worked over (ref. Operation Twist as just the most diabolically brilliant inflation sanitization tool) by policy that the market has lost part of its mind and is semi-berserk.  It’s fun though.