Nonsense

I was listening to Bloomberg earlier and an economist was on that said that the move lower proves that the market does not like the austerity measures passed by Congress. Is that why we are trading tick for tick with Europe? Do they have anything to do with this? Has he considered the fact that hardly any austerity measures are kicking in right away? Or that economic numbers across the World are coming in weak?

I hate when people try to use market movements to prove their economic or political views. The fact that the market is down today proves that the market is down. And thats it.

2 comments:

Anonymous said...

Excellent point!

Anonymous said...

Markets are pricing in a mild recession.  Where a drop of 20% used to take months, it is now accelerated thru today's rapid information flow and HFT.  Trouble is the selling exacerbates the macro condition and can sometimes make the recession worse.  Reflexivity is dangerous when there are robots running the show with unlimited leverage.