Market Vitals: Does one dare defy the bond bubble?

Does one dare defy the bond bubble when QE3 arrives?

Many analysts, including us, often explain the move into US Treasuries as a flight to safety when investors are faced with global economic risk. Indeed, there is a long list of serious risks out there. And the US has the deepest and most efficient capital markets.

But we read today another perspective - that the surge in bond prices is actually a result of risk taking (not risk aversion.) More specifically, since the onset of QE and the rollercoaster of expectations for more, bond traders buy up bonds ahead of Federal Reserve bond manipulation (i.e. QE.) And then they sell once more QE is actually announced - a "sell the news" sort of thing ...

Market Vitals | 17 July 2012 ~ http://blackswantrading.squarespace.com/storage/market-vitals/071712_mv_qe_bond_bubble.pdf