The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Gut-speak

06/16/2020

Without numbers, an opinion is nothing more than a gut-feeling.

So, here’s my gut feeling:
1.  The stock market hit a bottom in March.
2.  A modest rebound was expected.
3.  Instead, the market rebounded very, very strongly.
4.  Market watchers could not explain the strength of the rebound.
5.  However, an increase in retail traders and day-trading was also inexplicable.
6.  Professional sports were cancelled all across the country in early March.
7.  Las Vegas noted that sports betting decreased dramatically.

My gut suspects that those people, who normally bet on sports, starting betting on stocks.
Stocks were pushed up to unsustainable levels by sports-denied gamblers.
When the PGA and NASCAR returned last week, they started taking their gambling money back to Vegas.
Whenever new money dries up on Wall Street, it gets ugly . . . like last week.

Of course, that doesn’t explain everything happening on Wall Street . . . but what does?

 

 

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