Read this and wondering if anyone agrees? http://www.deleverme.com/2009/11/clip-how-social-mood-can-lead-events/
This is what Robert Shiller talked about earlier this month on a morning CNBC spot that the dramatic rebound in the markets this year can be attributed from anything like the Obama charisma to plain old animal spirits.
Events move markets, both ways up and down. Even with all this algorithmic/box trading, greed and fear take their toll. And there are always some insiders who take positions before the event (even orchestrating events) :eek:
A lot is baked in, but some isn't. Dubai wasn't but there's ways to tell if it will derail or not. A lot of the time there's a force much bigger at work and that little event is just a small blip. He's right though. It's not enough to cook the trend a lot of times. A lot of headlines = trend damage
I was thinking about this during Obama's recent tour through Asia. During that week Hang Seng and Kospi were plainly overvalued (Obama visited Shanghai, Beijing, and Seoul). Now, sure there may have been some speculation that there would be some announcements during the trip. But more than anything, I think the markets were buoyed by an ABSENCE of negative news during his visits. Think about it - certainly the Chinese and Korean governments made sure to clear the table of any negative news during Obama's visit, in order to ensure all media coverage was upbeat and positive. Sure enough, there was a vacuum of bad news all week. There was a similar, though less pronounced effect when Hillary last came through the region.