So, you may have seen. The markets were up big today.
U.S. stocks jumped on Wednesday, giving the S&P 500 its best day since December
And why were the markets up today?
European Central Bank President Mario Draghi suggested earlier Wednesday that further stimulus to tackle the euro zone’s debt crisis would not necessarily be forthcoming…
The ECB left interest rates unchanged following its meeting Wednesday.
So the ECB did, nothing. No really. It literally did nothing at all today. It specifically said, typical of pols in trouble, that someone else should be doing something about the finance issues in Europe. And that caused markets worldwide to soar?
But what is the real reason people say the markets went up today?
but speculation persisted that the ECB could act if financial market tensions intensify further.
The market went up that much on speculation, rumor and innuendo.
But but… I’ve been told repeatedly that the market is efficiant. It is rational and all the information needed exists in the prices. Entire careers and economics departments have been created due to this theory.
Again, I’m an amateur, however, it seem easy to me to see that the market is most definitely not efficient and runs rampant on rumor, innuendo and speculation. That theory is the triumph of the academy over reality. The market is not efficient and yes, does run on rumor, innuendo and speculation. That’s bloody obvious to see and today proves it rather simply.