Recent Blog Posts
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The $4.5 Billion Dollar Bank Run
Nov 07 201111:20 am EDT -
The Times' Rorshach Geithner Story
Apr 27 20099:26 am EDT -
Sinking Animal Spirits
Apr 27 20098:45 am EDT -
Counter-cyclical Urban Policy
Apr 26 200910:00 am EDT -
Be Your Own Counterfeiter
Apr 26 20099:36 am EDT -
Being Tim Geithner
Apr 25 200912:37 pm EDT -
Notes From a Press Conference Naif
Apr 25 20099:41 am EDT -
What Good is the News?
Apr 25 20098:32 am EDT -
Stressful Enough
Apr 24 20092:29 pm EDT -
Not Regretting the Pound
Apr 24 20091:09 pm EDT
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News Doesn't Matter, Dell Edition
Megan Barnett has a great little story today about the stock market's reaction to news that Dell has been hit with a lawsuit from New York Attorney General Andrew Cuomo: the company's shares were last seen up $1.25 apiece, or more than 5%. To put it another way, Cuomo would seem to have increased the value of the company by $2.8 billion.
There's even a great quote from one of those people who is convinced that news moves stocks, even when it's obvious that it doesn't:
Goldman Sachs analyst Laura Conigliaro said she thinks investors might be pleased the suit wasn't connected to a separate investigation by the S.E.C. into Dell's accounting practices, the Associated Press reports.
Oh, for an analyst or a journalist to be able to admit that there isn't always a causal relationship between news releases and stock-price moves! The fact is that Dell stock went up and (weak version) nobody knows why, or (strong version) there simply isn't a reason at all.
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