Independent analyst Jim Bianco just just wrapped a very bold presentation at The Big Picture conference, where he talked about the weak economy and critiqued the actions of the Fed.The most interesting comment came at the end, when he talked about the fact that the markets have been falling ever since Romney started surging in the polls after the debate.
Our assumption was that this was a spurious coincidence, and that the market doesn’t have anything to do with Romney. The most interesting thing, we figured, was that it at least flied in the face of the idea that a Romney win would be much better for the market, and that thus the Romney debate win should have been bullish.
But Bianco was insistent that there was an explanation. A Romney win would mean Bernanke out, and a likely much more hawkish Fed, perhaps helmed by monetary economist John Taylor, who has been a big opponent of QE.
We’re still a little sceptical about this, but actually we heard this come up twice so far at the conference, so it’s something on people’s minds. And if you really think that the market is based all on Fed action, then there’s logic to it.
So, a bit surprising, but at least interesting that people are talking about it.
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