Ghost of Igloi wrote:
Maserati,
OK, I think your opinion represents the consensus view, for the most part.
However, stock market performance, consumer confidence and peak employment are all lagging economic indicators.
Igy
My view is my view only, and I have articulated it here and given my reasons.
Again, one key aspect of my view is that "economic" conditions do play a role in pricing, but one must understand that there are business economies, social economies, personal economies, and institutional economies, all of which have different dimensions, and all of which guide the investment decisions of a particular entity, be that entity an individual, a fund, an institution, a sovereign, etc.
When assessing price levels, it's useless to reduce "economic conditions" to a global "national economic conditions" metric.
Consider effective market participants and their economies: nation-states, sovereign wealth funds, hedge funds, pension funds, investment banks, central banks, etc. For the past while their "economic conditions" have dictated a ceding of control to algos. Price levels are now controlled by this factor, and by their economies--not by the mom-and-pop household economy, not by the GM auto-industry economy, etc.--and they have clearly indicated that algo trading best represents their economic interests at this time.
The buy-in is nearly universal, if not actually universal, among those whose decisions make any identifiable impact on aggregate markets.
"Lagging indicators", indeed. By how long are they lagging, Igy? By 9 years?
You can't just throw around terms like "economic conditions" without specifying what you mean, or they will be just as likely to be used in opposition to your position, as has just been shown.