By bending the risk-return curve, investors can adjust to the fundamental market environment and tailor their risk exposure for more consistent long-term investing.
"I had to return this product because it is only for bananas that curve to the right and I can only find bananas that curve to the left, " a one-star reviewer complained.
However, just the anticipation of additional quantitative easing and still lower long-term interest rates has already potentially begun to pump up the next bubbles, as investors have moved out the risk curve in an effort to find higher rates of return.
By keeping the yield curve flat, QE2 pressures banks to make more higher-return loans as investing in treasuries and short-term facilities provides a lower and lower profit margin.
Or the odd shape of the oil-futures price curve, which suggests the market thinks the price could spike later this year, then fall and return to today's prices by 2012.