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Crazy Federales

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I read yesterday that the some of our august federal lawmakers may launch an investigation as to why the market took a tumultuous drop on Thursday last and then added more insult the following day.

Good grief! Yes, it was a precipitous drop. But market drops are caused by people and companies who sell stock, shareholders headed towards the exits, often in panic, right after someone screams fire! If there is a fee or reward (hopefully financial) for decoding this mystery, please have the government send it to directly to me.

In this case, the fire was a Greece fire, and a friend sent me an e-mail telling me to short the euro this weekend. While that may be an idea for the long-term, it’s good that I did not leap to it on Monday. Why? Because the euro went up, that’s why.

And, yes, trading is different now. Something like 70% of it is done by hedgehogs hedge funds and the like — people who pull a lever and sell for 10,000 customers at once. But basically, if everyone is selling, the market goes down, right? Do have the government send the reward directly to Richard Hoe, okay?

Have a wonderful and happy week. Do good work.

Check out more blog entries from Richard Hoe.