Bernanke Risks ‘Very Unstable’ Market as He Weighs Buying Bonds
2009-01-26 00:01:01.2 GMT By Rich MillerJan. 26 (Bloomberg)
How can they even contemplate another "Operation Twist" when the PSBR will zoom in the trillions this year and next?! Buy long bonds with one hand, sell trillions of new bonds with the other? It just gets worse & worse.
"Operation Twist" was an infamous experiment in the 1960's to change the shape of, "twist", the Treasury yield curve. By all accounts it was a total flop, but some are trying to rehabilitate its reputation. (That no one has attempted a repeat in 40+ years tells you something about its actual success.)
PSBR: "public sector borrowing rate" a UK term but quite useful.
JRB
1/26/09
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