The Bears Need To Get Their Story Straight

bear dead

Yes, that’s right. It’s another green arrow on your TV (or computer) screen today. The stock market is up again, as prediction’s of the rally’s imminent demise never fail to be disappoint.

Market sceptics seem to have two explanations. The first is kind of conspiratorial. It’s all short-covering, quant-buying, Goldman Sachs (GS), program trading, plunge-protection, yadda-yadda-yadda. The steady high-volume, late-day rallies on otherwise low-volume days feeds right into this.

The other sceptical explanation is that investors are all seeing the world through CNBC-built green shoot-coloured glasses, and that at best, we’re reading too much into minimal, second-derivative nonsense. They say (and to some extent we agree with them) that the real economic news is still absolutely awful, and that if we ignored the stock market (and it’s related sentiment indicators) then we’d find very little to chear about.

A lot of people subscribe to both of the above, but they really should pick one and get their story straight. It can’t be all computers buying AND all the result of cloudy thinking and a faux show of confidence. Presumably, computers don’t need confidence or green shoots to buy, and a deluded populace wouldn’t need program trading.

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