Good News Is Bad News. "Those who would understand the mysteries of the marketplace must drink deeply of the well of Wisdom." That's Socrates, 122BC.
Now Socrates, may or may not have said that. But if he didn't, he should have. Take Friday, the 8th: the financial news was intoxicating. The jobless rate fell to 4.7 from 4.8. virtually no unemployment. Chickens boiled and steaks sizzled in the pots and pans of American workers. And since even the price of crude declined, there would be eclairs and frosty cakes on the table for dessert. Investors rubbed their hands in glee - visions of sugar-plum profits danced in their heads.Wait a minute. That specialized market place we call the New York Stock Exchange swooned with horror! The Dow Jones dropped 96 points. Why? Well to understand, you need another swig from the Well of Wisdom. Good news is bad news. All that bubbling prosperity will energise the inflation fighting Fed to up the Fed Funds Rate, maybe even half a point instead of the usual one quarter point. So reflect the buyers and sellers of equities.
Therefore the decline in the DJ. Naturally bonds swooned too. The 30 year treasury zoomed to 5.04 knocking down the price of course.
Inflation, like the ghost of Hamlet's father stalked the stock exchange. Good news is bad news due to federal interference in the cost of credit.
