Correlating the stock market with economic policy
Actual financier Paul Kedrosky posts at the Daily Beast, examining the argument that the stock market hates Obama’s economic policy:
But all of this is beside the point: The Barnes/Hannity market model isn’t how stock markets work anyway. Markets are, in the short run, a random walk, right up there with Brownian motion of molecules in a coffee cup. To the extent they even do anything semi-predictably, however, they rise on the rumor, and fall on the news. In other words, far from being surprised that two major and widely anticipated Obama announcements saw market declines, a more intelligent take is that things played out pretty much as expected. Saying otherwise is plain dumb, or maybe simply being grotesque and cynical.
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