Who To Believe? The Government Or The Market?

Sept. 30 (Bloomberg). . . second paragraph:

“The Irish banking system is at rock bottom today,” Finance Minister Brian Lenihan said today in a Bloomberg Television interview in Dublin. He rejected speculation Ireland will need outside help. “It can only revive from now because it’s recapitalized and reformed,” he said.

Last paragraph (referring to Ireland's deficits):

“The final estimates are shocking, one would think that this draws a line in the sand on the issue,” said Dermot O’Leary, chief economist at Goodbody Stockbrokers in Dublin. “The market will determine though whether it believes Ireland can cope.”


Funny how news is written, as if it's counting on you to just quickly scan it and move on, hopefully repeating whatever sound bite you've just been given. I often read from the bottom to the top, a habit I developed while proofreading copywriting. Where are they leading me to? That's what I want to know.

The above excerpts interest me. First, it starts with the propaganda. Then at last, it gets to reality.

In this case, the reality (as difficult as it is for governments to swallow) is that the market determines the good and the bad. Why? Because investors vote yes or no, day in and day out, with the ultimate ballot . . . money. Money has a way of getting itself heard loud and clear.

I try to keep this in mind amid the deluge of propaganda from governments, bureaucrats, central bankers, and corporate news organizations.