Bad news is good: Doublethink in the stock market

The media’s rationalization for yesterday’s (November 28, 2007) stock market rally was that the Federal Reserve vice chairman, Donald Kohn, made remarks before the Council on Foreign Relations about the state of the economy and hinted about future actions of the Federal Reserve. Mr. Kohn’s comments, widely credited in the media for a 2.8% surge in the S&P 500, were not particularly upbeat.