Bernanke says economy
on mend, traders swoon
A graph of the DOW minute by minute on Thursday. Watch the lemmings flee!
“Ben Bernanke gives a press conference and says generally positive things – and the world explodes.”
When I heard this on my car radio around 2 p.m Thursday, I sat bolt upright.
Kai Ryssdal was reporting from the Frank Stanton Studios in Los Angeles on the Marketplace show produced by American Public Media.
His producers are so fast. The stock market in New York had been closed barley an hour when Ryssdal was on the air.
Kai Ryssdal of the Marketplace show produced by American Public Media and aired on NPR stations.
He was talking about the 353-point plunge in the Dow Jones Industrial Average yesterday, and it’s relationship to the meeting the day before of the Federal Reserve’s Open Market Committee, of which Bernanke is chairman.
“The take away from that meeting is that the economy is actually doing better. So the Fed can stop greasing the skids, pumping money in,” said Ryssdal, who is almost my neighbor and lives in a community adjacent to Pasadena.
And yet the stock – and bond – markets plunged.
“Wall Street dropped hard yesterday, harder today … and don’t even get me started on bonds, people….”
This guy – and his writers – beat CNBC hands down.
Next up, a chief strategist for Prudential, interviewed on the show, said the markets dropped when Bernanke used the word “optimistic” – the quants watch it second-by-second.
The Punchbowl analogy that followed made me laugh out loud.
As someone nearing retirement, I pay great deal of attention to investments. After all, I may need them sooner rather than later [hint: In the (K)now].
I raced home and got on the phone with my broker, Sebastian C. (he is not allowed to be named in the media, he said, by his company which shall remain nameless – it doesn’t deserve free promo).
My orders at a brokerage company which shall remain nameless.
You can see the results in the image. Buy, buy, buy and … buy.
The economy has been on the mend for months now. If you follow the right sources like I do, you know this. Check out Bill McBride’s site, Calculated Risk.
Corporate profits are obscenely high; the housing market is on a tear, almost bubble-like. For five years it was dragging the economy down, now it has reversed direction.
Anyone In the (K)now would have done what I did.
Even if the slide continues today, the longer term outlook is improving all the time.
Ben Bernanke said on Wednesday the economy is getting better. Stock traders – or their algorithms – flee for the hills. They’re just like lemmings.
As of 7 a.m. PDT, with the market open just half an hour, the DOW is up 47.27 points.