Do central banks really control markets? Notwithstanding the fervent hopes of millions of investors, they don’t. From Tom Luongo at tomluongo.com:
The big story of the past couple of weeks is rising bond yields. Everyone’s talking about it. Everyone’s got a theory about it. Even me.
Why are yields rising?
What does rising yields mean?
But, to this point I’ve kept my mouth mostly shut on this, at least in public. I reserve my gut reactions for my Patrons, giving us the opportunity to work through ideas.
The financial press industry is obsessed with gut reactions because headlines are all that matters. It used to just be to sell newspapers or generate clicks. But now, with algorithmic trading, headlines are the market.
Central banks and politicians use their pulpit in real time to stick save markets or push them in whatever direction they want them to go — at least in the near term.
So do short-sellers, media personalities, and boiler room blowhards… but enough about Jim Cramer. The market is comprised of all of this confusing and contradictory information.
And it’s why we’re obsessed with the news flow and desperate to parse the purposefully opaque language of those with control over the money spigots.