Since the bottom in stock prices, and the top in bonds, the monetary base has dominated all other exogenous variables on the movements of stock and bond prices.
As the base increases, the stock market advances and the bond market declines. Markets follow Fed action precisely.
Thursday's announcement of a major increase in the base has caused a sell-off in bonds and an increase in stocks, gold, and commodities.
Saturday, July 18, 2009
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