What's That Definition of Insanity?

The first round of quantitative easing didn’t goose the economy. QE2 accomplished nothing other than to mask the true size of the federal deficit. OK, it did more than just that — QE2 also engorged the Fed’s balance sheet, debased the dollar, inflated the stock market and caused commodity prices to spike.

So let’s try more of that, shall we? We might:

Investors should prepare themselves for a third round of quantitative easing, Simon Maughn, co-head of European equities at MF Global, told CNBC Wednesday.

“The bond market is going in one direction which is up-falling yields which is telling you quite clearly the direction of economic travel is downwards. Downgrades. QE3 (a third round of quantitative easing) is coming,” said Maughn. “The bond markets are all smarter than us, and that’s exactly what the bond markets are telling me.”

Fed Chairman Ben Bernanke still thinks he’s smarter than the bond market.