First the good news: no-point 30-fixed mortgage rates are back under 4.00 percent (depending on the usual qualifiers), down a quarter-percent since the first of the year. Global stock markets are declining in some concert, but there is no “crash” event, no self-feeding liquidation fueled by excessive leverage. This is as orderly a sell-off as sell-offs ever get. Stocks get the ink, but usually don’t deserve it. Volatility is in the nature of stocks, true up-down rocketing around. A great many people claim to know why stocks have gone up or down, yet stocks are the least predictable of all markets. For all of that unpredictability, contrasting today’s causation theories leads to the heart of the matter. The creationist wing of finance blames the stock dive on the Fed. They say -- all anti-government types -- that the Fed’s quantitative easing bloated asset values, and so it’s the Fed’s fault now that financial assets are unwinding. They also say the Fed now ...
- First the good news: no-point 30-fixed mortgage rates are back under 4.00 percent (depending on the usual qualifiers).
- Global stock markets are declining in some concert, but there is no “crash” event.
- The stocks-economy connection is too tenuous to count on, yet there is one solid linkage: global trade tends to benefit all parties, raising corporate earnings, and global trade has stopped its 25-year growth trend.
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