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Well, I have to respectfully disagree with you... IMHO, everyone has the same inputs into the model. Therefore, I cannot define it as quackery. The weights that different people assign to those inputs can and do vary wildly, but that is the way these largely subjective things work...

My one question about this is if mkts are truly this difficult, why are the biggest macro funds, like Bridgewater or Brevan Howard, not throwing the towel? Just sayin'...

Yeah, but that's the thing... The process of understanding the world around us often starts with stuff that appears like real quackery. My favorite example of this phenomenon is J.J. Thompson's "plum pudding model" of the atom. Sure, it's been shown to be pretty much all wrong, but one could...

Well, his logic is that the high unemployment is such a desperately bad thing that it pretty much justifies anything, including the kitchen sink. I can't really defend this view, but if you look at stuff that people like Blanchflower, for example, have written, you can see a reasonably eloquent...

Well, how about this argument that is put forth by Evans in the speech (as well as someone like Blanchflower elsewhere)? Basically, they say that the cost of high unemployment when the economy comes out of a recession is understated by the raw numbers. The reason is that many of the unemployed...

Busy... Been busy, sire.

Well, this is the thing... I think you're being too harsh with the "saltwater doves" at the Fed (Evans is one of them, even though he's in Chicago). The case they make has all sorts of credible motives. I don't disagree with the reasoning, per se, but I think they're magically willing away...

The empirical grounds are, basically, a bunch of regressions performed over periods of non-zero interest rates. And yes, you see, that's the meat of the debate... Let's say you loosely believe the Taylor Rule, as it's applied during "normal" periods. Given that it operates with nominal...

Well, to be sure, there's probably some reasonable empirical grounds to believe that the Taylor Rule is a reasonable model (with the emphasis on model). Many central banks across the world (BoE, BoC, RBNZ, etc) use these approaches. Like all models, these aren't perfect, but then what in life is?

Ah, my friend, what sort of a macro shag are you if you don't know and luv the infamous Taylor Rule? Especially if Taylor gets picked by Romney to replace Benjy... The Taylor Rule-like frameworks have been the basis for all the rate machinations and QE is just treated as the extension of...

If I may, how about a (somewhat rhetorical) question in response to your question... Is there a direct connection between the main short rate (FedFunds, in this case) and the jobless rate?

Well, tbh, there are occasionally these genuine opportunities where optionality is massively mispriced. However, these types of "no-brainer" trades are few and far between and, even in those cases, timing is still a very important element. So I was generally willing to assume that Bass managed...

There's all sorts of things wrong with the gold standard. It's equivalent to bending over and grabbing your ankles, ready to receive some not-so-gentle luvin' by your economic rivals (they would have to be responsible for the lube and Barry White; if they felt like it, of course). That is the...

Why not? There's a very simple thing that will make them less risky...

Sorry, TU=ZT=2yr note futures...

Judging by the recent rhetoric, an IOER cut isn't very likely (certainly, not with the money mkt fund reform stalled). However, if you think it's a non-zero probability, TU is cheap here. I am long and I think it's one of the best in class calamity hedges around.

No, I mean STIR futures and options on them. So sub-2y interest rates... As to the books, you can try the "Eurodollar Futures and Options Handbook" by Galen Burghardt. It's sort of the bible.

Yes, if there's sufficient evidence that it's the real thing, so to speak...

Alan Howard is predominantly involved in rates, with front end being the main focus. The instruments are various interest rate derivatives and the strategy is discretionary macro. Obviously, Brevan has a whole lot of PMs doing all sorts of other things, but Alan takes the main risks (esp now...

Sorry, ogar, I just saw this... It's an interesting question that I have actually spent a good while pondering over. If you're still interested, I'd be happy to share my thoughts.