Wednesday, September 29, 2010

Market Update

The dips today have been met with high levels of equity call buying. Traders seem to think there is easy money in buying the dips.

Easy money never is.

4 comments:

Taylor Conant said...

The sentiment after a big government intervention seems to always be, "The market is never going down again, THEY won't let it!"

And then it does, and everyone is caught with their dick in their hands.

CP said...

And there hasn't even been a government intervention!!

Just empty talk!

How many times have we seen this movie since 2007?

CP said...

Before this depression is over, I'm waiting for investors to PANIC when a government intervention is announced.

That would be a more rational reaction.

Taylor Conant said...

Enough times that we should really think about returning it as we probably have a massive late fee at Blockbuster by now.

I agree with your comment on what a "rational" reaction would be, but that would be rational only if the market participants were educated on free market economics AND if the market participants were moralistic enough to refuse bailout money. Without the second qualification, the rational thing to do could still be to pump the market higher knowing everything would be priced in devalued currency, or easy money, at least temporarily. Otherwise, the market is failing as a "discounting" mechanism.