Hostages to Fortune ?

Brad DeLong and Matthew Yglesias report that operation Twist worked, because 30 year bond yields have declined since it was announced.

Brad “30y Treasury yield down 13 bps, 2y yield up 5bps. Exactly what you would expect with announcement of twist operation.” So Brad why were you so sure that the 30y yield would not decrease by 12 or 14 bps ? Do you use “exactly” exactly according to the exact dictionary definition ?

Matt Yglesias also reports that it works. He didn’t type “exactly” and showed a bar graph.

The latest from Bloomberg shows change from last close of +0.03% not -0.13 %

I actually don’t know if this means -0.1 from the announcement or +0.03 from the announcement. I don’t really care. 0.1 % one way or not will make almost no difference.

The answer to the question is no. Yglesias and DeLong did not give a hostage to fortune, because making a big deal about -0.13% is silly no matter what happens later.

OK Brad did say the FOMC did 10% of what it should have done. That is giving a hostage to fortune. – 1.3 % sure isn’t enough but it is significant. +0.35 % not so good. So that is a hostage to fortune hanging from a linear extrapolation.

Possibly irrelvant figure on certainly tiny changes after the jump.

update: The figure shows the 2 days after compared to the day after. So the 30 year yield is lower than it was at the time of announcement. I have trouble with time zones. As I typed before when I didn’t know for sure what day it is. Who cares ?

update II: Good thing I didn’t give any hostages to fortune. The change in the 30 year Treasury bond yield Sep 20 to latest is now -0.4% which sure isn’t negligible.