Submitted by Tyler Durden on 09/20/2012 - 15:03 Ben Bernanke Equity Markets
Once again, the unintended consequences (or fundamental flaw as we noted previously) remain front-and-center, just as with prior episodes of QE, we have seen the market surge into the very assets that the Fed has promised to buy (in this case into Eternity). 30Y current coupon mortgages spread to 10Y Treasuries has fallen - rather stunningly - below 20bps. An all-time record low by a mile. Homebuilders and broad equity markets are not so excited as in his failed attempts to drive people into risky assets (stocks), those 'smart' people have simply front-run the Fed's MBS buying deluge - more than willing to sell the market back to the Fed while reaping some additional yield.
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http://www.zerohedge.com/news/bernanke-fails-herding-cats-again-market-simply-front-runs-fed
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