- Economy tags:
_aioseop_keywords: Economy, SociÃ©tÃ© GÃ©nÃ©rale, French Trader, France, Trading,
Fraud, Federal Reserve, USA, Stimulus Package
There's a lot of confusion going on in the markets right now and some believe that there are market rallies right around the corner while others think we're going down. I was talking to the Market Doctor yesterday and he's convinced that, 1) we are in a Bear Market, and 2) this is a Bear Market Rally we're experiencing. Based on the global carnage we saw this week, and several major indicies are now trading 20% below their peaks (aka as a Bear Market), I'd say he might be right. He's not the only one who's seeing the market action with Bearish eyes.
Sudden Debt poses a valid question in his latest post (emphasis mine):
In 25 years looking at the US economy and global markets, I have never seen such swift action from the Fed and the government, theoretically designed to avert or ease a looming recession. For example, the Fed's 75 bp one-day cut was the largest in its history and the fiscal stimulus bill was approved by Congress in record time. Everything is being done in a great big hurry. Why? And what further conclusions may be drawn from such action?
Yes, what was it with this sudden 75bps rate cut? Was it a Fed knee jerk action to the major Monday sell off, which we're finding out now was probably a result of SociÃ©tÃ© GÃ©nÃ©rale's $7 Billion USD unwinding of a rouge trader's fraudulent trades, or does the Fed know something we don't know? Chances are the former and latter scenarios are correct, at least for me, and the Market Doctor might be onto something.