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TheDumbMoney (51.61)

How People Keep Misreading the Fed

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April 04, 2012 – Comments (2) | RELATED TICKERS: SPY

So I do some blogging here now and some on my new blog "The Dumb Money," for the benefit of Twitter.  Here is a post I did there today:

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So the dominant reaction I am seeing to the Fed’s announcement (via its minutes), that QE3 is unlikely, is summed up by this tweet from a man I call The Reformed Stockpumper, Henry Blodget:

Wall Street drug addicts dismayed to hear Fed may not pass out any more tubs of free heroin. So market crashes…

This perfectly encapsulates how many professionals, traders, and partisans continue to misread the Fed.  Yes, the market dropped yesterday after the release of the minutes.  Yes, it’s dropping even more today.  But two comments are in order....

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For the rest, see here. (If you think it's totally inappropriate for me to link to an outside site here, don't hesitate to let me know.  I might ignore you, but I might take it under advisonment if you tell me that I'm turning into Turnkeyoilsocks or one of those other non-substantive self-promoters.) 

2 Comments – Post Your Own

#1) On April 04, 2012 at 11:25 AM, EnigmaDude (82.55) wrote:

Personally, I think the market is overdue for a correction and the latest "disappointment" about a lack of QE3 is just the excuse being touted by the media.  I also read about poor Spanish bond sales being the reason.  At this point, any bad news at all is likely to cause the market to decline, but I don't see a "crash" coming, especially with the encouraging jobs report.

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#2) On April 04, 2012 at 12:41 PM, TheDumbMoney (51.61) wrote:

Hi Enigma, yeah that's my first of my two points.  Market was looking for a reason to freak out.

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