Market Follies

January 6th, 2012 at 12:59 pm

The stock market is bouncing back off its lows but I’m once again struck by the unmedicated-manic-depressive nature of today’s financial markets.  The jobs report, while by no means great, was, in fact well above expectations.  But apparently, since it came in below the very unrealistic expectations created by yesterday’s ADP report (unrealistic, that is, unless you read this), traders were disappointed.

If you had insider information yesterday that the jobs report would come in above market expectations, and bought call options accordingly, you’d be out of the money today.  Go figure.

Source: Google Finance

Anyway, see here for rational analysis of the jobs report by CBPPs chief economist, Chad Stone.

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2 comments in reply to "Market Follies"

  1. Michael says:

    Hasn’t the MF Global thing pretty much established the fact that the stock market is a casino, not a method of allocating savings?

  2. John Kurman says:

    Question, perhaps unrelated, but given that some people are starting to realize how many Defense jobs will be lost, could this be a reason for the slide (I know, I know, when it comes to stock market, it’s all just-so stories).

    Related question to first unrelated question: Have we been in a Defense bubble since 2002? 1982? 1952? (Reading the most excellent “Loser Liberalism” and am now suspecting all growth of the Long Boom was Defense bubble related).