Friday, August 26, 2011

Explaining the unexplainable.

Market doesn't make sense until you realize it is just a casino for business people. Earlier this week the stock market in the US rallied as all Indexes climbed up from the lows of a week ago in anticipation of Ben Bernanke's speech this morning. Most talking heads on CNBC and other business news outlets suggested the market rise was because Bernanke was going to announce QE3. Then yesterday they questioned if the markets weren't setting themselves up for a big disappointment if Bernanke didn't announce QE3. Well today we got the answer. He didn't even mention QE3 or Quantitative Easing as a possibility. How have the markets responded so far? You guessed it, there is a big rally. The Dow is up 170 points right now after being down over 200. That's almost a 400 point swing.

Anyone who thinks they know how to explain these moves as rational, is crazy. Europe still has massive problems and yesterday's action in the DAX the past 2 days is worry-some to sober rationalists.

Now some are suggesting the rally is because of the Hurricane Irene. They suggest the purchasing of batteries and emergency supplies will help the economy. My God, are they suggesting we just need a disaster to solve our economic problems. We don't really have the money to repair whatever gets damaged from this storm.

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