Down goes the Dow

It was a release of the minutes... yes.

So, are you saying that there is not a correlation between the release of FOMC minutes, and upswings/downswings in the market?

MASERATI was right. The drops and recoveries are the same:

http://www.bloomberg.com/news/2015-01-08/market-tracing-familiar-pattern-as-s-p-500-plunge-stops-at-4-.html

Janet Bernanke wrote:

It was a release of the minutes... yes.

So, are you saying that there is not a correlation between the release of FOMC minutes, and upswings/downswings in the market?

The market responds to every piece of information that it can, so yes, there is a response to the release of the minutes. This goes nowhere to proving that the Fed has perffect control of the financial markets.

Yes, they do. This quote sums it up, decently...

"they are all artificially influenced by outside factors. Interest rates are low because of the Federal Reserve's actions, corporate profitability is high due to accounting rule changes following the financial crisis and the Fed's liquidity program artificially inflates stock prices."

http://streettalklive.com/index.php/blog/daily-x-change/2553-as-we-enter-2015-charts-bulls-should-consider.html

The Fed seems to be the common theme, here. I suppose the common question will be "what if the Fed didn't act?" And that would be a great question. Would the correction have already taken place? And ultimately, would a smaller Fed balance sheet result in a correction on a smaller magnitudinal scale?

Once again, just because the Fed actions affect asset prices does not mean they have perfect control, nor does it come close to proving that that is their only intent.

Funnster wrote:

MASERATI was right. The drops and recoveries are the same:

http://www.bloomberg.com/news/2015-01-08/market-tracing-familiar-pattern-as-s-p-500-plunge-stops-at-4-.html

um right, maser was right. Except for about a million other calls which were wrong, including this one:

"I see a crash, AND inflation, in the short term. No, I'm not a nutjob living with my guns and ammo. I don't want to convert to a survivalist mentality, but I could if I needed to.

I'm wondering how to weather a storm that will see HUGE initial pain, die-off's, a breakdown in scale and increasing regionalization, and a new, more economic equilibrium, and I'm wondering how I can even begin to prepare for this while not simply buying seeds, guns, and water."

Read more:

US stocks now up for the year.

how do you like them apples?

Janet Bernanke wrote:

It was a release of the minutes... yes.

So, are you saying that there is not a correlation between the release of FOMC minutes, and upswings/downswings in the market?

Exactly. Old news, there is nothing there that hasn't been expressed before. If you don't believe me check out Fed Fund Futures the last 2 days. Nothing to see there as well, move along.

Nous Sommes Charlie.

Gente,

How many languages do you speak?

agip wrote:

Funnster wrote:

MASERATI was right. The drops and recoveries are the same:

http://www.bloomberg.com/news/2015-01-08/market-tracing-familiar-pattern-as-s-p-500-plunge-stops-at-4-.html

um right, maser was right. Except for about a million other calls which were wrong, including this one:

"I see a crash, AND inflation, in the short term. No, I'm not a nutjob living with my guns and ammo. I don't want to convert to a survivalist mentality, but I could if I needed to.

I'm wondering how to weather a storm that will see HUGE initial pain, die-off's, a breakdown in scale and increasing regionalization, and a new, more economic equilibrium, and I'm wondering how I can even begin to prepare for this while not simply buying seeds, guns, and water."

I guess he didn't tell you that he was talking about fracking companies :)

It never ceases to amaze me the number of people who will tell you that nobody can predict the stock market....and then proceed to attempt to do exactly that.

And now....$20 oil??

maser was right about the ratcheting governor, but we are seeing an interesting drop today which, unfortunately for the bulls, looks to be eminently rational.

manipulated growth of the markets is very important, along with gdp fudging, because the debt is reported as %GDP, so artificially enlarging GDP makes the insane debt seem not so bad--although even at that, the debt as a % of GDP is STILL horrendous, about even with WWII

Prediction: The Dow will close 5 points up on the day. You heard it here first.

Since when it's dropped 35 points in 5 minutes but I'll stick to my guns.

-170.50

Nice call, MORON.

The "Fed controls the market" conspiracy theorists on this site are the reason I rarely visit the message boards anymore. I'm too informed for this garbage.

Lord Maynard Hayek wrote:

The "Fed controls the market" conspiracy theorists on this site are the reason I rarely visit the message boards anymore. I'm too informed for this garbage.

You gotta admit, the entertainment value is off the charts. These K5 and Maserati wannabes make me laugh.

more on the 'the dow is a stupid index'

they booted out alcoa last year - it has doubled since, compared to a 17% gain for the dow.

this happens almost every time. The classic was when they added Microsoft and Intel in 1999. Hah.

http://www.wsj.com/articles/booted-from-blue-chips-alcoa-rides-high-ahead-of-the-tape-1421000593

Groucho Marx didn’t want to join a club that would accept him as a member. Alcoa Inc. was better off after getting booted from one that no longer wanted it.

Shareholders have laughed all the way to the bank since the aluminum producer’s expulsion—by a committee that includes editors of The Wall Street Journal—from the venerable Dow Jones Industrial Average was announced in September 2013. The stock has doubled compared with a 17% gain for the Dow industrials, after trailing the index by 25 percentage points in the previous 12 months.

agip wrote:

more on the 'the dow is a stupid index'

they booted out alcoa last year - it has doubled since, compared to a 17% gain for the dow.

this happens almost every time. The classic was when they added Microsoft and Intel in 1999. Hah.

http://www.wsj.com/articles/booted-from-blue-chips-alcoa-rides-high-ahead-of-the-tape-1421000593

Groucho Marx didn’t want to join a club that would accept him as a member. Alcoa Inc. was better off after getting booted from one that no longer wanted it.

Shareholders have laughed all the way to the bank since the aluminum producer’s expulsion—by a committee that includes editors of The Wall Street Journal—from the venerable Dow Jones Industrial Average was announced in September 2013. The stock has doubled compared with a 17% gain for the Dow industrials, after trailing the index by 25 percentage points in the previous 12 months.

And how exactly did being removed from the Dow impact Alcoa?

huh? I think you are missing the point - the point is that the DJIA is a poorly constructed index of 30 handpicked companies. A committee makes the decision to expel a company and replace it with something else.

This kind of randomness, combined with the inherent problem of a price-weighted index (wherein a $200 stock would be 10x as important to the index as a $20 stock), makes the Dow a crap piece of work.

But to your question -

Alcoa stock probably suffered for a short time as funds that track the Dow had to sell it, but clearly the stock bounced back. The change has no real affect on Alcoa.