Thursday’s steep plunge may have felt like the End of Days for T-bond traders, but it will likely turn out to have been just an egregious overreaction by the lunatics who trade this vehicle. Draghi’s drum-rolled speech, together with a move to reduce already negative rates on eurodeposits to minus 0.3%, apparently fell short of expectations. In today’s markets, not loosening ‘enough’ is treated as though the ECB were about to tighten massively. That’s how torqued traders are. And it’s not as though money managers — or anyone else, for that matter — should be happy if rates were pushed down to minus 1.0%, or 2%, or…. Does anyone actually believe that that would stimulate ‘growth’ in Europe. Of course not. Even so, the usual talking heads and op-ed bloviators are claiming European banks would be more eager to invest if rates were pushed even further into negative territory. But invest in what?? The answer, as everyone well knows by now, is in leveraged financial instruments and stocks, since they, not the manufacturers of actual things, are where all the easy money is being made these days. Our strong expectation is that yesterday’s brainless hysteria will be reversed: The dollar and T-bonds, which got crushed, will turn sharply higher; and the euro, which soared to $1.10 USD, will resume its collapse to our very long-term target of 80 cents.