Why are economists and speculators comments so influential?
March 22nd, 2008
Roger L asked:
When comments are made regarding the stock exchange/commodoties/forex by these people, is this not defamation of a particular currency of a country /stock and why do investors hinge on every word said by them. It is a known fact that the stock exchange/commodity index/forex cannot be predicted by a single entity ( only speculated) and if can be, then it is criminal by insider trading definitions.
When comments are made regarding the stock exchange/commodoties/forex by these people, is this not defamation of a particular currency of a country /stock and why do investors hinge on every word said by them. It is a known fact that the stock exchange/commodity index/forex cannot be predicted by a single entity ( only speculated) and if can be, then it is criminal by insider trading definitions.
Why are investors so dependant on these people who clearly are just guessing. Gold was set to be currently at an all time high and jet it is almost the opposite.
TALMAN
Criminal insider trading is one thing. (see link)
But the stock market appears to live on news which might be hard news from numbers about the economy, or what the market did yesterday. Or what other markets are doing.
Economic theory posits the more buyers and sellers in a market the more efficient and accurate the pricing will be. I have heard at least one comment (someone on NPR or APM) that the reason the Dow Jones Industrial is swinging up and down so widely is because there are fewer buyers and sellers. Basically some many are cashed out and sitting on the sidelines. So if a medium sized buy or sell comes along it can move the market more than it used to. Hence the jagged performance we are seeing.