The FED announced a huge new stimulus package (as did the Bank of England earlier today).
I'm also surprised because I'd expect stocks to tank because that's what would make economic sense to me. People at home, not spending money, unemployment soaring. So far I'd assume this situation has more of an impact on the actual economy than the financial crisis but the market seems to disagree.
I guess the lesson here is that FED meddling/cheap money trumps all other factors. But that would mean eventually things should crash really fast.
The best lesson from "The Alchemy of Finance" (my favorite investment book) is that the market just represents the current bias, not the true situation but eventually converges to the true situation. That's subtle but hard to grasp. At least it was for me. Or in other words...what makes economic sense isn't necessarily reflected in the current market prices (as the efficient market hypothesis would suggest).
I'm also surprised because I'd expect stocks to tank because that's what would make economic sense to me. People at home, not spending money, unemployment soaring. So far I'd assume this situation has more of an impact on the actual economy than the financial crisis but the market seems to disagree.
I guess the lesson here is that FED meddling/cheap money trumps all other factors. But that would mean eventually things should crash really fast.
The best lesson from "The Alchemy of Finance" (my favorite investment book) is that the market just represents the current bias, not the true situation but eventually converges to the true situation. That's subtle but hard to grasp. At least it was for me. Or in other words...what makes economic sense isn't necessarily reflected in the current market prices (as the efficient market hypothesis would suggest).