Cognitive Disconnect of the Day

This is the front page of nytimes.com earlier this afternoon. It's a tough time to be a journalist: clearly moves like this are clearly newsworthy, but equally clearly it's very hard to say anything intelligent about them. Hopes for a rate cut? Bargain hunting? Well, maybe. Nobody really knows.

If a rate cut is capable of moving markets, that's incredibly good news, since everybody (including me) was convinced that monetary policy was pretty much tapped out at this point, and that a reduction in the Fed funds rate would have very little impact on credit, or, through credit, on equities.

As for the bargain-hunting, I'd be more inclined to believe it if there were some indication of where all the money was coming from, or if volume were higher.

My feeling, for what it's worth, is simply that no one has a clue what stocks are worth, and that therefore they're liable to swing around wildly on little or no news. But it's hard to put that on the front page of nytimes.com.

(HT: Zubin)