[Mase]

All that financial destruction, and the entire bond market is missing it? Isn't it amazing that all those individuals and corporations are buying bonds that cause them to lose 5%, 6%, 8%, and more, of their investment every year?

Who knew the smart people were all here, while the millions of others doing all the buying are the stupid ones?

[CowboyJay]

"Who knew the smart people were all here, while the millions of others doing all the buying are the stupid ones?"

Here's where the smart money has been since 2005:



I think the tacit rule with Fed easing is that the ibanks have to keep the bond market flush or risk having the tap shut off.

Bonds are also a "safe haven" investment, so in a risk-off environment, portfolio managers can point to the marginal gains, and doctored official inflation numbers, and say "well, at least we outperformed XXX this year, and protected the original capital investment". They couldn't care less if their clients are realizing real gains, so long as that big fat paycheck keeps rolling in. RISK AVERSION is the key to longevity in finance.

Meanwhile, if you check what these PM's actually have in their personal holdings, you'll probably find they're long commodities and emerging/developing markets.