Friday, 5 August 2011

This Week's Market Tantrum.

Today's market action can be summed up as; WTAF

The best quote of the week; "Over here, [Federal Reserve Chairman] Ben Bernanke stopped QE2 and has convinced people that he has their back. Now, they've got a gun to his head and the markets are saying 'give us more QE3 or we'll melt the markets down by Wednesday. The markets are going to force the politicians to deal with these problems... we have to admit these things and solve these things." From Dylan Ratigan of MSNBC.

Yesterday I said;” The plunge protection team in FED and all Governments in all countries would not give up so easily after spending trillions.”. And sure enough we had calls from all the world governments for action.
 China and Japan called for coordinated action to avert a new worldwide crisis sourced to Europe and the United States, as did European Economic and Monetary Affairs Commissioner Olli Rehn.” Bunga bunga Berlusconi had a tele-conference with Angela Merkel and our great Timmy. … Late in the day, the White House said President Barack Obama had spoken separately with Merkel and French president Nicolas Sarkozy about the eurozone crisis but offered no details of their discussions.(Reuters)

By the way, The Economist ran a special report on BB Berlusconi in their 11th June issue.

ECB agreed to buy the bonds of Spain and Italy and the markets in USA rallied.

So we can be sure that the whole world will go on feeding the addicts. Is it possible to ride a tiger without getting killed? The politicians of the world are going to find out soon if they can tame the Banksters. I doubt it.
Next week is going to be interesting. On 9th we have the FOMC and if uncle Ben does not give the addicts their daily dope, there will be tantrum again.

From Businessinsider; “With markets tanking, and the economy weakening, buzz about the Fed doing QE3 has really heated up.
The FOMC meets next week, and the Jackson Hole conference (where QE2 was announce) happens soon thereafter.
But arguably, the next round of general easing has begun.
Yesterday at 3:00 AM the Swiss lowered interest rates to stem the rise of the Franc, and last night Japan intervened to make its currency weaker.
And then today, the ECB confirmed more bond buying, so however you slice it, the central banks are back into easing mode.
On Twitter, Nouriel Roubini declares that the latest currency interventions from Switzerland and Japan represent the start of QE3, ultimately ending in more Fed easing.”

All the tax breaks are for the super rich and more free money for the Banksters will surely help maintain the wealth effect. When they don’t get the free money, they create panic. Remember Hank Paulson? This is a great country or what.
However much they try there is a limit to keep the Ponzi scheme going. And the bubble is going to burst sooner than expected. This week’s action was just a prelude.
So dear readers, can you predict next week’s market action? You do not need TA. Really. Send your thoughts based on your understanding of the market action.


PS. Now the reason behind the sea-saw of the market for the whole day is clear. The market surged at the open but nose-dived by noon. Because the big boyz knew about the down grade by S&P. 

From politico;" Rumors of a downgrade filtered through a volatile stock market, causing the Dow Jones Industrial average to swing by 416 points as it teetered between losses and gains to close the day up slightly by 0.54 percent.
The possibility of a downgrade overwhelmed the initial surge caused by a government report showing the economy had added 117,000 jobs in July, beating analyst expectations"
 The question now, what caused the market to go up and DOW end in green.

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