Courtesy of Pam Martens.
Dow Jones Industrial Average, Intraday Moves on December 18, 2013 from BigCharts.com
If you’ve read that the stock market staged a big rally yesterday on the news that the Federal Reserve’s Federal Open Market Committee voted to begin to taper its bond buying program by $10 billion a month beginning in January, you’re in possession of half the news.
Here’s how the New York Times presented that half of the news: “Stocks rallied on the Fed’s move, with the Standard & Poor’s 500-share index ending up more than 1.5 percent. Investors saw the pullback as a vote of confidence in the economy.”
Investors saw no such thing. This is pure, unadulterated malarkey.
By 5:34 p.m., the tell-a-lie-a-thousand-times-and-it-becomes-the-truth mantra was in control of mainstream media, with the Wall Street Journal’s MarketWatch reporting: “Two U.S. stock indexes notched record closing levels on Wednesday as markets interpreted the Federal Reserve’s decision to begin the tapering of bond purchases in January as confidence in the underlying strength of the economy and welcomed its commitment to low rates for a considerable time.”
That last sentence about confidence stands in stark contrast to what the Fed actually said in its announcement. The Fed noted that “the recovery in the housing sector slowed somewhat in recent months” and “Fiscal policy is restraining economic growth…” That’s hardly cause for rejoicing.
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