Courtesy of Mish.
Several readers sent emails prior to the Fed hike on December 16 that the stock market would collapse immediately following a rate hike.
I commented on that sentiment in Knowing the Unknowable; Reflections on the Fed Hike. Here’s a snip.
“Epocalypse” Now
The first person, an economic blogger, tells me a global economic collapse of biblical proportion is coming. He labels the collapse an “epocalypse” and offered a guest-post article that I passed on.
I responded “No one knows the precise timing of a collapse. There might not even be one.
Stocks could do a slow decline like Japan for years.”You can start a countdown, because yesterday he pinged back “Check in with me at the end of the week.”
Checking Back In
I gave “Epocalypse” more than the few days he asked. The end of the week would have been the 18th. It’s now the 29th.
This is what I see.
Curiously, the market is right where the market closed on the day of the hike. Anyone who bought short-term CALLs or PUTs expecting high volatility lost money.
The rate hike was the most telegraphed Fed move in history. No one had any advantage in knowing the Fed would hike.
…
