The news cycle is moving almost as fast and furious as the equity markets. I have combined commentary from around the web that I feel best represents the issues we are all facing.
Needless to say, the CNBC story suggesting a ‘fat finger’ was the cause of the market chaos we witnessed last week is pure tripe…unless of course they are referring to a certain infamous finger located in the middle of the hand….
ZeroHedge: Summary Of The Biggest Bail Out Ever: Even Keynes Is Spinning In His Grave
Europe has now followed the Fed in its all in move to prevent the disintegration of the euro and of Europe. As we expected, the EU was leaking various rumors to gauge market interest, and as speculated earlier, the final cost ended up being just short of one trillion. Here are the key summaries:
- EU Crafts $962 billion show of force to halt crisis
- Full blown monetization: ECB will buy public and private bonds
- Fed reactivates swap lines with Bank of Canada, BOE, ECB, BOJ, and the SNB
In other words, total and unprecedented monetary lunacy, as every cental bank, under the orchestration of the Federal Reserve, will throw money at the problem until it goes away, which it won’t. As we have long expected, Bernanke is now willing to sacrifice the dollar at any cost to prevent the euro unwind. This is nothing than a very short-term fix, whose half life will be shorter still than all previous ones.
Market-Ticker: EFA Euro Zone Notes
I’m listening real-time to the “conference” this evening… these are “first blush” comments…
They’re throwing the kitchen sink at this, but it’s not real money for the most part – it’s “guarantees.” Exactly how they get the rest of the €600 billion is open to question. Only €60 billion is “real money.”
Market-Ticker: Bernanke: Liar (Again)
In response to the re-emergence of strains in U.S. dollar short-term funding markets in Europe, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing the re-establishment of temporary U.S. dollar liquidity swap facilities.
There’s been no “strain” in dollar funding markets.
There has been an extreme level of strain in Euro funding markets.
Mark Fisher is a legend on Wall Street and in the commodity trading world. His take on the Selloff last week is spot on…
Mark J. Lundeen from Lemetropolecafe writes: …If I’m correct that we will be revisiting the March 2009 lows, and then on to new Bear Market lows, we will see plenty of big up days ahead of us. How’s that? Well, unknown to most people, the really big up days occur during the Big Bear Markets.
The venerable Richard Russell wrote: “I believe that bear market has taken over again. I expect stocks to be locked into an extended downtrend for the rest of the year. For that reason, I expect a flood of bullish propaganda to pour out from the Administration, the Treasury, and the Fed. But it will be so much water over the dam, and after a while the voting public will realize that is just more of the government’s BS. The government’s rosy propaganda will become a joke.”