Again, today’s news held onto me, but not for the same reason as yesterday. Yesterday, the quantity of interesting news kept me reading. Today, specific interesting content is the reason I am slightly behind …
The stability of the modern interlinked world economy, with its rapid transmission of information and shocks globally, has never been more dependent on confidence …
The above is obvious, but underneath is a connection to the market that requires further thinking. I don’t have space to explore the connection deeply here, but I can drop my thought so others can ponder it – if the current market environment (behavior) is, as many market veterans have said, unlike anything ever seen, then, given the obvious reality above, will this erratic behavior become more normal and less “odd” The world economy will only link tighter, information will continue moving in massive quantities at light speed, and the geo-political upheaval is not running out of energy anytime soon. Putting a fine point on this, the 24-hour global cycle of “news,” on more “channels” than I can identify, changes market sentiment in a flash …
Amplifying nerves right now is a barrage of disaster commentaries from both sides of the political spectrum as well as the financial industry – each appearing to outdo the other on dire warnings.
Bad news sells, and purveyors of bad news have shored up their stable of “talent” with anyone who will spout the most utterly ridiculous commentary. What happened to those who for the past three years have been telling us the DIJA would drop to a 1000 Quite simply, those who now shout about the death of the euro and Eurozone have replaced those other pass pundits.
The problem in this “new world” is fundamental news that is not dire is “boring,” so it gets buried under the avalanche of “credentialed” pundits sounding supremely knowledgeable. In reality, though, many of those pundits know nothing more than anyone who actually studies the market. Proclaiming with certainty and arrogance that something is does not make it so. For example, I’ll bet the average person if asked would say because of the European debt crisis, the European economy is a disaster. Check this out …
… a surprising 1.2 percent jump in euro zone industrial production in August, a month marked by the white heat of the bloc’s sovereign debt crisis. Crucially, production jumped even as business sentiment surveys indicated a contraction of factory output for the first time in two years. What’s more, the jump was not driven by the relatively robust giant Germany but Italy, Portugal, and Ireland. UK exports in August, for example, hit a record high …
I find this phenomenon fascinating, as it speaks to the real future possibility that information flow and focus will remain more important than reality. If so, how will anyone relying on facts rationally participate in a market forever moving on the latest dose of non-information
Trade in the day – Invest in your life …
