Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: ild who wrote (29440)	5/5/2005 6:54:57 PM
From: Perspective	Read Replies (4) of 116555

Market-bullish and "good news" are not necessarily synonymous. If you imagined devaluing the dollar by 50%, you would expect it to double the prices of everything, from apples to zuchini, automobiles to stocks. Something that I realized a little late is that it doesn't take good news to move stock prices higher - a shift in the yardstick you're measuring them in can do it as well. If everyone anticipates that the Fed can shrink the yardstick some more, then market prices can move to reflect that. It's when the realization hits that the Fed can't force the debt to grow any further, and the yardstick locks or even reverses, that things head south in a hurry. BC

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