How Things Have Changed

James Surowiecki from January 6:

As I showed yesterday, investors overwhelmingly supported the Paulson plan: it was only when it was killed, that stock prices really started their downward spiral. And it was only after Obama unveiled his economic team and made clear how big his stimulus plans were that the market began its sharp recovery (the S. & P. 500 is now up twenty-five per cent since Nov. 20th).

Surowiecki made what I call, the “Daniel Gross Mistake” which is to read partisan political opinions from stock market returns. January 6 turned out to be the exact near-term high. Since then, the S&P 500 is down 16.7%.

Posted by on February 20th, 2009 at 1:18 am


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