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View Diary: Summers Quits, Markets Soar (15 comments)

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  •  I enjoy this correlation ... (4+ / 0-)

    but I'm not convinced it's causation.

    One thing that Taleb frequently ridicules is the way financial commentators attribute changes in the market to the news of the day. You know things like:

    DOW down 15 points on news of air traffic delays in Chicago.

    "The smartest man in the room is not always right." -Richard Holbrooke

    by Demi Moaned on Mon Sep 16, 2013 at 09:40:54 AM PDT

    •  However... (4+ / 0-)

      ...the correlation between takedowns of neo-right policy and market rallies is rather well established.  Remember that conservatives view something like financial markets differently than the rest of us.  An efficient financial market (for the most part, public equity markets in the US still meet this definition) tends to respond (after the fact but quickly enough to be hard to trade against) to news based on what it means for the valuation of stock prices.  Demand (and low interest rates) make for higher equity valuations, all other things being the same.  (Thus, the market has already priced out Summers' demise.)

      Conservatives don't get this: in general, in conservative thought, equities prices are a function of the moral worth of the economy.  (Expansionary fiscal policies are bad because they create "easy money", a term used as though it were "easy morals."  What it comes down to is that when the common folk are prosperous, it promotes immorality.  US politicans are pretty open about this: Tom DeLay famously explained "family breakdown" to be the consequence of smaller families whose kids are more affluent.)

    •  I agree (1+ / 0-)
      Recommended by:
      Demi Moaned

      I'm always amused when heading home from work and there is some sort of BS attribution to the daily market's movement.  Something akin to:

      Markets ended up today on news that GM CEO was getting a manicure.

      Today, however, feels like there is a bit of a sigh of relief.  Perhaps its only my rose colored glasses.

    •  Hey! (2+ / 0-)
      Recommended by:
      ybruti, Demi Moaned

      Everybody lays over in Chicago. Those lost 15 minutes multiplied by a couple hundred thousand people multiplied by their average hourly rate, plus the cost of three out  five of them choosing to get a bagel or extra cup of coffee, plus two out of five choose to use the restroom, which uses an extra five gallons of water each.....

      That drains +/- $7,000,000 out of corporate travel budgets and the city of Chicago infrastructure budget.

      You scoff at a 15 delay....

      © grover


      So if you get hit by a bus tonight, would you be satisfied with how you spent today, your last day on earth? Live like tomorrow is never guaranteed, because it's not. -- Me.

      by grover on Mon Sep 16, 2013 at 10:36:32 AM PDT

      [ Parent ]

    •  Agreed (1+ / 0-)
      Recommended by:
      BayAreaKen

      It's typical lazy reporting.

      -You want to change the system, run for office.

      by Deep Texan on Mon Sep 16, 2013 at 11:32:49 AM PDT

      [ Parent ]

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