If your flight is snowed in at Chicago,

Perhaps you can make it down to Wall Street and ask one of the herd what the deal is.

Regards

Tremor... Oh, sorry, I had this monster burrito last night.

It seems to me that the best measuring stick is the Swiss Franc, rather than oil, gold, the dollar, or the pound. If the Euro is rising against the Swiss Franc, that does seem premature - and exploitable.

Still expecting markets to be rational all the time ?

To sum it up:
--if the Euro is rising, the markets must be wrong, while
--if the Euro is falling, the markets must be right in 'pricing in' risk.

What a dispassionate examination of perfect-information markets these days ;-)

Just an FYI, you might be interested in this report from the Fed SF branch called "Estimating the Macroeconomic Effects of the Fed's Asset Purchases."

Here's the url: http://www.frbsf.org/publications/economics/letter/2011/el2011-03.html

Few quick bits, the first on something you've written directly about:

"These studies suggest that, on balance, the first round of asset purchases probably lowered yields on the 10-year Treasury note and high-grade corporate bonds by around half a percentage point. To put this in perspective, it would take roughly a 2 percentage point cut in the federal funds rate to achieve an equivalent half percentage point drop in the 10-year Treasury yield, based on patterns since 1987."

The most interesting section is the discussion of the Fed's model for econometric prediction. The summary line for that is:

"The full program raises the level of real GDP almost 3% by the second half of 2012. In turn, this boost to real output makes labor market conditions noticeably better than they would have been without large-scale asset purchases, benefits that are predicted to grow further over time. By 2012, the full program's incremental contribution is estimated to be 3 million jobs, with an additional 700,000 jobs generated just by the most recent phase of the program. Increased hiring lowers the unemployment rate by 1½ percentage points compared with what it would have been absent the Fed's asset purchases, as shown in Figure 3. Based on other simulations, providing an equivalent amount of support to real economic activity through conventional monetary policy would have required cutting the federal funds rate approximately 3 percentage points relative to baseline from early 2009 through 2012, an obvious impossibility because of the zero lower bound."