Zeev's Turnips Patch-No Politics (ZEEV)

[market_watcher]

If it were 'self-evident' you wouldn't be asking me these questions, because we would both be in agreement simply by the nature of the question.

'Common sense' comes in because I am making an argument based on the proposition that Greenspan is privy to data that enables him to understand the probable reaction of bond market participants to his actions based on the fact that he interacts with these bond market participants on a frequent basis, not on some law of nature. 'Common sense' would say that at some point in these interactions, Greenspan gains knowledge of the probable reaction to his attempt to peg long-term rates and the likelihood of its failure, given the relative strength of the market vs. the strength of the Fed.

Thus, 'common sense' would say that he knows his plan will fail, unless some unlikely event occur, like the bond market not driving up long rates in anticipation of inflation increasing.