With the Dow up triple digits one day and down triple digits the next, this is the perfect market to lose money in. This from the conservative Cato Institute:
On the one hand, the Fed endorses and requires the use of risk models; on the other hand, it undermines them by its own erratic monetary policies. The Fed asks us to believe that it alone, out of all the regulatory stress testers, will be the one to get it right – and this despite the Fed’s disastrous forecasting record.
If the movements of the Dow Industrial Average reflect investor sentiment, my interpretation is that investor sentiment is an incomprehensible mixture of extreme greed and extreme fear.
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