Asymmetrical Information

Stocks up two days running. Oil up $1 Wednesday, down $2 today. Euro up, $Canadian up. Latter is obviously driven by fleeing hordes of liberals.
What does this mean for the CW? The currency markets are reacting to the certainity that the US deficit will rise. Is this good news?

You know, I always wondered how Marketplace, et al. knew what drove stock prices up and down.

I could say "now I know" in response to your post, but you won't turn my skepticometer off that easily. How do you know how stock news is reported?

Disclaimer: I'm new to your site, and new to you. For all I know from reading your "about" page, you ran Wall Street during your summer internship. Shed some light. :-)

Stocks were up today on my dog getting a new leather collar.

mentioning the issue of certainty re: elections
leads to a tangent (no other comment thread
here to post it for public view, just finishing
up last comments re: election),
noting this article re:
international observers here watching US
elections:

http://news.yahoo.com/news?tmpl=story&u=/ap/20041104/ap_on_el_pr/election_observers_2
> Election Observers Draw Mixed Reactions
> WASHINGTON - In some quarters, they were seen as
> outside intruders trying to tell the United States
> how to run its affairs.

Imagine that somehow things were reversed
between this and the Iraq election, and Iraqi
soldiers had been here in this country helping
run and "secure" the election, and were known
(for thought experiment purposes) to favor
Bush. How much trust would the Democrats have
in the process considering they were prepared
to be paranoid as it was if there were
"another florida" type situation. Given their
past treatment in Iraq it would seem to
make sense that the minorities within Iraq
might perhaps be uneasy with the US presence
there and why the US in general may be helping
fan the flames of discord, insurgency over
there (as Cato clips I posted before noted) even
if we are truly over there being parternalistic
but not interfering in the election. These
people aren't exactly used to being able to
trust or respect leaders as it is.
We need to be careful when we project
our mindset re: assuming if we were over
there we'd be welcoming the US soldiers and
wanting them swarming around us (even if
we were ones who appreciated the "liberation").

re: cost of war btw (which you noted isn't big
impact on the economy, which is true in
% of economy sense, but then unsure as noted
what might have happened) this falls into the
category of it being too late now, and these
ideas in particular may not have been viable
(too many movies perhaps :-) ), but guessing
there was a major lack of creativity in
approach
even if something had to be done over there.
might be wrong, but just seems like with
all the time they had to prepare and plan
things might have gone differently even if
my off the top of the head ideas are silly,
I didnt' spend any time thinking through it.
it seems like with over
a decade involved over there the US might have
spent a smaller number of $billions to have
infiltrated high and low tech intelligence
gathering sources over there to have been
able to know better what was going on over there.
There likely was some way to have pursued things
without the wholesale war that took place if
they had focused on objectives other than going
in and completely taking over the country and
winding up in this mess.

Or if needed to, then to be
able to find Saddam to target him personally before doing anything else, decapitate the leadership
and scare any replacement into compliance
cheaper than the war. (or say managed to
get some intel when Dan Rather interviewed him (without Dan knowing, carefully hiding
transmitter in tv camera in way they wouldn't
find),
apologizing for the glitch that the air strike
hit before Rather left... Or Bush or some envoy
prominent enough to get a personal meeting with Saddam could have volunteered to sacrifice his life (potentially) rather ordering countless others to their deaths, if they thought the cause
so urgent. met with
Saddam and somehow taken him out in perhaps unrealistic movie type scenario (pinprick from
ring on handshake (if the guy would) with poison/disease or suicide bombing having
had surgically implanted fake ribs (if they
insisted on xrays) composed of explosives, etc.
Or perhaps picked some
empty area of the desert to avoid casualties
and gave warning
to evacuate and dropped a nuke to illustrate to
remember they were up against a superpower, especially if it could be visible from Bagdhad but not close enough to harm people there..
Anyway, granted there may have been need for
followup involvement, etc. I guess the point

oops, I guess the point is that I wrote that
earlier while groggy when i first got up,
but hadn't clicked post. should have proofed
before I just did. sorry. Anyway, time to stop wandering
off on tangents on someone elses blog now
that the election is over, back to writing
code rather than english :-)

You were writing English?

Who knew?

Maybe this is to conspiratorial...but is it possible that a Soros laden consortium might have bought calls on oil futures to drive up the price to effect the prices, and therefore effect the election?

This is a pet theory, but I can concieve that it could possibly be true, I would like to check it against some facts to verify though.

Sorry, many typos, and some that make my post mean things I did not intend, the risks of commenting under the influence, all the more reason I so highly respect vodkapundit.

to should be too. I can conceive should read I canNOT conceive.

sorry for the confusion.

Let's wait and see. If the market constantly goes up, I'm going to think a Bush/Cheney win is viewed as being good for business, investment and profits. Do you think this would happen if Kerry had been elected and then made is first speech and said everyone making over $200,000 is going to pay more taxes?

Bryan - If for the last 30 years, the same man had won every election by 99.9% (with whoever voted differently shot immediately), I think Americans would be a little more receptive to foreign troops monitoring the election.

Yeah, absent a really huge new story, almost all the explanations of why the market went up or down are guesses at best.

My personal favorites are the tautological ones. "Profit taking" is the best of these. Profit taking is alleged as an explanation for why prices went down. But profit-taking is also taking place when prices go up. So basically, profit taking means 'supply of sellers greater than demand from buyers'... well, duh.

"Bryan - If for the last 30 years, the same man had won every election by 99.9% (with whoever voted differently shot immediately), I think Americans would be a little more receptive to foreign troops monitoring the election."

Don't be so sure. Perhaps if I said Cuban
troops? mainland
Chinese troops? Russian? Iranian?
I could ask,
but somehow I doubt (to use a similar example),
Russian immigrants I know would think
US troops in the past in Russia monitoring
elections when democracy began to open up
there would have been appreciated,
or would be appreciated today to guard against
Putin's anti-democratic moves. (there may
be some peaceful international monitors as there
were this time in the US, not troops).

"Bryan - If for the last 30 years, the same man had won every election by 99.9% (with whoever voted differently shot immediately), I think Americans would be a little more receptive to foreign troops monitoring the election."

hmm. pretend you were in this country in civil
war times in the north and were black, and the
south had won and sent troops up to monitor the
elections to ensure things went their way?
Obviously the minorities in Iraq aren't slaves
but given how they have been treated in the
past there and given their lack of true
gut feeling for democracy fearing a tyranny
of the majority just as much through the ballot
box as through arms, and fearing for their futures. Obviously the US, *we* know, doesn't
wish to see minority groups there tyrannized or
rights taken away, but do these people have a
clear understanding of that, especially given that
the US has propped up dictators elsewhere in
the past, etc?

What would be the reaction even in this country
among some subset of the population
if the government today
decided they should go door to door and disarm
everyone? As news stories note, that sort
of thing is happening over there. Of course
the intention is that its for their own good,
but then perhaps these folks might oddly take
fears from an unlikely source of past history,
the jews in germanies past.... Again, obviously
the potential result likely isn't anywhere
near that bad and the US wouldn't go for that.
But given the past leaders in that country,
are these minority groups really going to
simply automatically trust govt that'll be
chosen by the majority? These aren't people
with the same background as us, we need
to take that into account when we think
about whats going on. Given the level of insurgents compared to Bush's pre-war fantasies of
what it would be like, it seems to make sense
to consider what folks like those at Cato
have been saying. and consider whether the
fears of outside influence, especially from
a country with a past like ours (even if we
know this is different) also have an impact on
fanning their fears that we may steer things
towards leaders the US approves of regardless of
what they are like if they kowtow to the US
in the right ways.

Measured in real money (that means euros) the American stock market is pretty much where it was before the election - what it gained in numbers it lost on the conversion rate.

Stocks were up because Soros had to cover his short interest in the U.S. market. Loser.

Joel Mackey -

I doubt that Soros had an effect on oil prices, but it's certainly not out of the question that Chinese, French and other governments shifted their purchase and storage decisions of oil with an eye to influencing the price of oil before the election (as Saudi Arabia did, in Bush's favor). All China would have to do is to order and stockpile more than it would have otherwise, since its oil usage is easily enough to affect world prices, and they're going to use the oil eventually. Of course, after the eletion they'll want to unwind part of this, which would lead to lower oil prices for the short term. France doesn't have the same purchasing power but could have had some influence, behind the scenes.

Did they do it? We'll probably never know, but it's possible. It would take major players to actually shift the market. Soros is fabulously wealthy for an individual, but that's not enough.

re: comments on this blog before re: the
president not having much of an impact on the
economy(this is re: markets
up, not oil being down).

Obviously the president has an impact on the
economy which is independent of any actual
direct actions he takes, even a term which hasn't started yethas an impact.
The markets and the economy in general are
effected by people's perception of reality and
not simply reality. Obviously decisions to
purchase, invest, hire, etc. are in part based
on a companies projections about the future
economy and about factors such as potential
future regulatory costs, timelines, etc.
People's potential fears of travel, choice to
telecommute vs. go spend money while traveling,
etc., effect business decisions for industries
impacted as does fear of healthcare cost
changes, etc.

In addition even if the deficit is small in
absolute terms compared to the economy, as is
increased spending due to the war, the public
perception of a potential greater impact than
they actually have also impacts decisions.
eg, articles noting issues of interest rate
increases by the fed mentioning the issue of
the deficit and debt ceiling about to be raised,
etc., even if they quote an expert saying
the deficit doesn't have much of an impact.

One difficulty with assessing the president's
impact on the economy is the problem of
the seen vs. the unseen. eg,I know some
held back from pursuing internet ideas due
(in small part) to fears related to potential
upcoming future government regulations. There
is of course the impact of inaction as well
re: deregulation, eg in healthcare industries.

or a smaller example but
one not often talked about, dealing with the
software&internet patent mess (re: obvious
patents) which deters people from pursuing
ideas for fear of getting caught in bogus patent
disputes causing concern re: unpredictable
legal expenses.

I guess the issue was that there wasn't much
difference between how either Republicrat
candidate would handle the economy regardless
of perception vs. one with actual libertarian
policies. (tangentially, i'd be curious how much waste and pork and inflated cost estimates, etc, etc., are in the $ figure for the war in huge
spending bills passed likely without much
scrutiny or fighting over details vs. just
being "the cost of the war, we must support
the troops", etc.)

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