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Friday, June 8, 2012

Obama averted Financial Crash today...

Yes it is a dramatic headline I know; unprovable too. But it is also quite plausible. Weekends have been when Euro leaders, their finance ministers or others, get together and either do or say something that the stock markets hate. It is timed on purpose of course to avert the assured stock market declines. And investors usually had to wait until Monday to sell their shares, usually at a greater loss than they would have liked.

But lately investors have wised up and have sold off on Fridays. They were going to do so again this Friday because there was little clue this week from Central Bankers of offering tons of almost-free money for the banks and primary dealers to plow into the stock markets (i.e. QE4, which was the hoped for policy).   

So today the President of the US steps forward and shows that he is aware of the anxiety before this weekend and after this week and to hint that he is on top of it (i.e. code for I will not let the present financial structure collapse today).

Such 'talking up' or even just 'talking about' should keep the stock markets from selling off today in droves. Great example of how the rules of Rhetoric can prevail over the rules of politics or economics.

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