A couple of years ago I remember having a discussion with a hedge fund manager. I told him about my theory that the next big surprise would be higher bond rates, not the other way round. I distinctly remember him lecturing me about the overwhelming forces of demographics, technology and globalization. All of these added up to deflation - not inflation. I couldn't convince him that when everyone agrees on something, it's time to expect something different. We agreed to disagree.
Today, the tables have completely turned. It's now fashionable to be a bond bear. So much so, I probably don't need to repeat the common bond negative narrative that has spread through the financial community faster than chlamydia at a Banff youth hostel.