Originally posted on Tuesday, February 21st, 2012
Ricochet.com, January 31, 2011 reports:
In what may be the strangest market indicator ever, a blogger found that the amount of laughter recorded in the official transcripts of Federal Reserve Open Market Committee meetings from 2000 to 2006 correlates almost perfectly with the rise in housing prices taking place at the time.
A particular series of side-splitting meetings by the central bank in 2006 marked the very top of the housing bubble.
It comes from a site called The Daily Stag Hunt. The research is theirs. Of course, FOMC minutes aren’t released until weeks after the meeting, so it’s impossible to use this new indicator — the hilarity reverse index — to make any money. It’s probably enough to realize that if they’re laughing now, you won’t be soon.
However exhilarating the ascent, a jet without a gyroscope will, eventually, prove impossible to fly. Even with the best will, the greatest acumen, and enormous reams of data, it is beyond the wit of mortal men to maintain monetary stability without the organic ongoing adjustments to liquidity balances provided by the convertibility of currency into precious metals, and back again, by those acting within the marketplace itself.
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