Hmm, the stock market rallied hard, for a little while, on the news that inflation was slightly less than expected. Enthusiasm seems to be waning now, by almost noon. Wonder what this means. Equites aren’t really cheap, but the rally on any piece of good news is still alive, although weak. Obviously this isn’t driven by actual investors but by the speculative game that has been running the market for years. I wonder how much of this game is emotional and how much is mechanical. In other words, how much is driven by animal spirits hoping to ride the next wave, and how much is driven by cheap money which makes speculation profitable? Seems like the cheap money is getting squeezed out of the system, but while it remains market participants in a position to use it will use it, they almost have to. And it makes me wonder generally about the proposition of lowering interest rates to stimulate the economy when what gets the most stimulation is speculation, and the increased financialization and digitalization of everything makes this increasingly more the case. Speculation is, I think, by definition, a non productive activity even if on the magins it sometimes provides useful byproducts. Maybe the only real benefit of lowered interst rates is whatever useful byproduct of speculation occurrs, and since the negative results of speculation are quite broad, I wonder if there is any net value at all. Anyway, as for the equity market, I guess the game goes on until both the urge and the ability to speculate have been wrung out. How much longer will that be? I wonder, actually provoking events which would meaningfully debase the dollar still seems a long way off.