Why Markets Are Melting

Zachary Karabell explains (again) that investment machinery often creates market activity unrelated to the strengths or weaknesses of the companies battered during times of uncertainty



"Stocks aren’t selling because of the Washington debt deal or now even because of yields in Italy. They are selling because they are selling."

Amplify’d from www.thedailybeast.com

I also watched in fascination as stock after stock sold off without any consideration of the intrinsic strength of the underlying businesses, even discounting for a possible global recession.

Stocks aren’t selling because of the Washington debt deal or now even because of yields in Italy. They are selling because they are selling. Apple this week is not a company with 12 percent less business than last week; Caterpillar is not about to sell 30 percent fewer earthmovers in China or Brazil. China is not about to purchase 25 percent less iron ore.

what the markets are saying about those companies, which is a sign that the markets actually aren’t saying anything about those companies, or about the U.S. debt burden or even problems in Europe. It is about the way that external triggers can set off market chain reactions that happen too quickly to react.   Read more at www.thedailybeast.com

 

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