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UBS ‘Blase Barometer’ Finds An Always Over-Excited US Investor
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
zerohedge.com / By Tyler Durden / 04/16/2013 17:56
The last decade has seen significant changes in media and communication. In a world where there is an ever louder cacophony of news sources competing for our attention, any one particular story has to be communicated at a particularly high volume if it is to attract notice. UBS’ Paul Donovan warns that this perhaps gives a tendency to sensationalism. For financial markets, Donovan notes, there is a risk that these changes in the world of media will impinge on the calm and reflective world of economics. Economists rely on sentiment data as a leading indicator for future economic trends. If individuals are overreacting to events relative to the past, however, sentiment may not be as useful as a barometer of future economic activity. In the US a certain economic hysteria seems to be developing, amongst consumers in particular (especially compared to Europe) and Donovan suggests investors would be wise to treat US sentiment data (particularly consumer sentiment data) with some caution as American investors appear to react more strongly to the underlying economic events.
Via Paul Donovan, UBS,
If individuals are overreacting to events relative to the past, however, sentiment may not be as useful as a barometer of future economic activity. At the very least there is a risk that sentiment will mislead investors as to the scale of likely moves in underlying economic fundamentals if there is a tendency on the part of individuals to overreact to the news flow.
Thanks to BrotherJohnF
2013-04-16 18:01:53
Source: http://silveristhenew.com/2013/04/16/ubs-blase-barometer-finds-an-always-over-excited-us-investor/
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