It is common sense that the stock market anticipates what will happen in the economy after some time. The invisible hand of the market driven by millions of investors who make decisions according to different quantity and quality of information eventually represent the best way to encapsulate and synthesize the current status and prospects of the world's economy. But is this always true? Or for some reasons markets are resilient to change and slow in timely reading the information available?
If this is the case, what are these reasons and when does this happen? Can markets be manipulated by strong hands or there are simply forces that render decision making viscous and create a breakout friction before markets actually change the course they are following? Like a ship takes some time before reacting after the wheel is turned.
Showing posts with label global finance. Show all posts
Showing posts with label global finance. Show all posts
Trade Talk Types and Skill
On Daily Speculations this is one of the best posts published lately by Victor Niederhoffer.
What are the many types of people who disseminate their views about the market?
Of all the characters this is the one I like the most, because I think these guys populates the web and the blogosphere:
There's the would be manager, the personage without funds who wishes to impress you with his knowledge and ideas so that you will put money up with him.
Of all the characters this is the one I like the most, because I think these guys populates the web and the blogosphere:
There's the would be manager, the personage without funds who wishes to impress you with his knowledge and ideas so that you will put money up with him.
China's Multiple Bubbles
Received from Angelica as a comment to my post Too Much Optimism In this Stock Market, I am glad to publish it because I find it very interesting.
I am in the camp that believes that this so-called economic recovery over the past 12 months has been completely due to government spending and stimulus. Trading volume since January 1st of this year has been very light and definitely not indicative of strong buying by the general public.
Who then is doing the buying? The Federal Reserve has representatives in the trading pits of the NYSE and commodity exchanges giving support to asset prices. I firmly believe we will experience years and years of deflation where everything goes down in value, yes, including gold and oil. Sorry for you commodity bulls but you are about to experience what happens to commodities when demand falls off a cliff.
I am in the camp that believes that this so-called economic recovery over the past 12 months has been completely due to government spending and stimulus. Trading volume since January 1st of this year has been very light and definitely not indicative of strong buying by the general public.
Who then is doing the buying? The Federal Reserve has representatives in the trading pits of the NYSE and commodity exchanges giving support to asset prices. I firmly believe we will experience years and years of deflation where everything goes down in value, yes, including gold and oil. Sorry for you commodity bulls but you are about to experience what happens to commodities when demand falls off a cliff.
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