“Stocks Soar on Summers Withdrawal” is the headline on The New
York Times Web site. It appears over a Reuters dispatch reporting
that Wall Street and global market indices were rising after
Lawrence Summers withdrew his name from consideration to be
chairman of the Federal Reserve.
Reuters explained that Professor Summers was “widely regarded as more eager to taper the Fed’s $85 million a month bond-buying program” than was Janet Yellen, another leading contender. As a result, “In early trading the Standard & Poor’s 500-share index gained 0.9 percent, the Dow Jones industrial average 1 percent and the Nasdaq composite 0.8 percent. Wall Street was following global markets higher. In afternoon trading in Europe, major bourses were as much as 1.3 percent higher. Hong Kong’s Hang Seng closed with a gain of 1.5 percent.”
The idea that the world’s companies would be worth hundreds of billions of dollars more without Professor Summers at the head of the U.S. central bank might be considered a point, or hundreds of billions of points, against him. Another way of looking at it, though, is that the dollars in which the value of those stocks are measured will be worth less if a Fed chairman or chairwoman with a looser policy than Professor Summers gets his, or her, hands, on the monetary policy levers.
http://reason.com/archives/2013/09/16/the-federal-reserve-is-run-by-an-unelect
Reuters explained that Professor Summers was “widely regarded as more eager to taper the Fed’s $85 million a month bond-buying program” than was Janet Yellen, another leading contender. As a result, “In early trading the Standard & Poor’s 500-share index gained 0.9 percent, the Dow Jones industrial average 1 percent and the Nasdaq composite 0.8 percent. Wall Street was following global markets higher. In afternoon trading in Europe, major bourses were as much as 1.3 percent higher. Hong Kong’s Hang Seng closed with a gain of 1.5 percent.”
The idea that the world’s companies would be worth hundreds of billions of dollars more without Professor Summers at the head of the U.S. central bank might be considered a point, or hundreds of billions of points, against him. Another way of looking at it, though, is that the dollars in which the value of those stocks are measured will be worth less if a Fed chairman or chairwoman with a looser policy than Professor Summers gets his, or her, hands, on the monetary policy levers.
http://reason.com/archives/2013/09/16/the-federal-reserve-is-run-by-an-unelect
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