Seance on Wall Street

[CHIMO]

There is a long history of mediums who claim to communicate with the dead. They sell their services to people anxious to talk to relatives or great figures of the past. Such exercises can be dismissed as harmless entertainment – people spend a few dollars to be treated to tall tales.

There is a Wall Street equivalent to these seances. People who claim to be knowledgeable about financial markets tell policy makers and reporters what the financial markets are thinking about current policy. These Wall Street seers claim to interpret events in financial markets for those of use who are less familiar with the mysteries of market movements.

In recent weeks, the Wall Street seers have been spinning stories about how the financial markets are very worried over the US budget deficit. They have told us that the markets are concerned about the government's ability to repay its debt. The seers tell us that the markets may soon demand much higher interest rates, if the government does not get its deficit under control.

The seers tell us that the government must take steps to rein in the budget deficits projected for the future by cutting back Medicare and Social Security. They also warn us about the risks of adding to the deficit with healthcare reform. And, the seers tell us that we certainly should not try to tackle the problem of 25 million unemployed or underemployed workers with another big round of stimulus. That would make the financial markets very angry.

http://www.guardian.co.uk/commentisfree/cifamerica/2009/jul/20/wall-street-us-budget-deficit

Don't know if anyone has noticed, but when the stock indexes go up government bond yields go up.

So when the government had to float more bonds, then the market went down. Yields went down. Bonds were sold. Then the market goes up.

Seems like market makers are making things easy for some. Not surprising when it may all be one and the same.