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What can you believe?

December 23, 2014

The more I try to just watch and learn from this market, the more I am convinced there is nothing you can trust. Case in point, take this current decimation of oil prices. I have read numerous pontifications about why this significant price drop is occurring. They include lack of demand, shale oil, OPEC… In all of these justifications, there is nothing that seems to be a new issue that is precipitous to such a rapid descent in oil prices. And then, somehow, it was this drop in oil prices that caused the equity market turmoil. What happened to lower gas prices freeing the consumer up to spend their money in other places? And what about the significantly reduced cost of goods to market? Wouldn’t this help producers and retailers with their bottom line and in turn help the markets? It seems there is no logical or intuitive answer to any of this.

Fed Whisperers

The last time the market seemed headed for correction (October), it was a Federal Reserve board member that whispered the possible need for more quantitative easing. This time Fed Chairwoman Janet Yellen noted the need to extend the zero interest rate policy. On both occasions they were effective in juicing the market. In fact, as of today, the Dow broke 18,000 points, a new record.This is now our market fundamentals — “the fed whisperers.”

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