The Alice in Wonderland Stock Market
As a financial markets trader, it’s hard for me lately not to feel that we’re living in a Lewis Carroll-inspired stock market. Stock prices often move counter-intuitively, and with large price swings that have the distinct smell of “momentum traders” rather than results of true fundamental changes in the U.S. or worldwide economy.
Stock prices frequently go down on decent news and up on weak economic news. It is not without reason, however: traders hope that bad news will force the Federal Reserve into yet another feckless but asset price-inflating round of “quantitative easing.” It is indeed an Alice in Wonderland market (or perhaps an Orwellian one) when good news is bad, and bad is good. A bad employment report pushes stocks up, and a strong GDP report (not that we’ve had one lately) brings out the trading Queen of Hearts screaming “Off with their heads!”
Please read the rest of my article for the American Spectator here:
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