Wednesday, April 2, 2008

Stock market explanations

Stephen Dubner speculates why journalists feel compelled to concoct reasons for why the market went up.

I may be wrong, but it strikes me that the articles that appear in nearly every newspaper every day that describe a particular day’s stock-market movements are pretty much worthless.

For example:
Consider, for instance, this A.P. headline and news brief that appeared on Yahoo! News at about 2:30 p.m. yesterday:

“Stocks Surge to Start Q2″

Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks amid optimism that the worst of the credit crisis has passed and that the economy is faring better than expected.


Steven suggests an alternative:
“Stocks Surge, Reasons Unknown; May Be Nothing More Than the Random Fluctuation of a Complex System”