"The Dow Jones, the main US share index, saw shares
plummet more than 360 points by the end of the week, amid concerns over
the state of the US economy."
Why did this headline attract my attention? Because one of my pet peeves is economists and their explanations of why the market rises and falls.
They will always have a ready explanation of why the market was up 20 today, or down 40. They will call the loss "profit taking". They will say it rose because the price of oil fell a little. They will say it fell because some big company reported lower profits than it had anticipated. They will say it rose or fell because there is a general feeling in the whole investment world that the state of the economy is bad, or maybe good, whatever.
Now to me, it all sounds like bullshit. I can make up those reasons too. How about if, as soon as the supposed "cause" occurs, they come out and say "today the market is bound to fall because such and such happened"? If they know the reason, the cause, then why don't they make predictions as soon as they see the cause show it's head? No, they are just Monday Morning Quarterbacks, giving the same old tired reasons for the ups and downs of the market, and at this point we can all make up reasons just as good, once we know which direction the market went.
So when you hear your evening news, and some moron explains to you why the market did what it did today, there you have it, another dope putting his worthless two cents in, as if he is really telling us something.
Granted, if Saddam Hussein arose from the grave and lobbed a few nukes at all our major cities, I'd expect the market to dip a bit, no? But in general, I think their reasons are unoriginal bullshit and they should just report the direction the market went without giving us any of their nonsense analysis as if it makes sense that the market would do what it did. Who the hell knows why it went up or down? Probably some high rollers decided to buy or sell a lot, that's all. Maybe they needed some cash. Maybe they had a few extra bucks today. Who the hell knows.
I once saw an astrologer on tv explaining what the market was about to do. I actually kept track of it to see if the astrologer was accurate. No, the astrologer was not accurate.
I just get annoyed when people on tv pretend to know something, when all they're doing is some tired old baloney that I could do myself. They have all the explanations. They can never be wrong, because they already know the answer. It's the same as saying, now, that it was obvious that the Rockies were going to beat the D'backs easily in the playoffs, because of profit taking and the fluctuating price of oil, and the profit picture of Walmart. Oh really? Then why didn't you tell me before it happened instead of after the fact? Now that would pull in some tv ratings.
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lfbno7 posted on Oct 20, 2007
| views: 199
Comments
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silverwhisper said on Oct 22, 2007....
having worked in the financial services industry, i can tell you that the explanations one sees on TV are often not bullshit. those guys see the fluctuations in the share prices with every single trade. with the right equipment and data, you can, too--although it'll cost you around $38k/year or so, IIRC.
ed
Comment on "Economics"
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