They can only do so much before they just let it run its course, which they should have done mid year without injecting billions of dollars and dropping the discount rates by as much as 1%. Inflation is going to get out of control yet no one wants to believe it. They think everything is fine, its not. The market has been ignoring the negatives for nearly 2-3 years now, they think the federal reserve can fix anything, but you have to understand that they did and try to fix it when greenspan lowered the rates down around 1%. What that created was what we have today, so did they really fix the problem, not really, all they did was create huge credit bubbles around the world in every asset class known. The bubble is still popping, it has yet to spill over to other areas, but will get there in time. Dont know if you have read my other posts, but keep a watch out for Credit card debt, Nearly $1 trillion of it. Thats the next major problem for this economy as housing isnt the piggy bank that it once was.
. One day it will rebound but this selloff has gone on for too long given that the fundamentals are stronger than ever. This obcesion with subprimes and credit and banking is unfounded
Retail may be the nail in the coffin for the economy/markets and whether we slide into negative gdp growth. It is certainly going to come close. Consumer confidence in light of rising gasoline prices, declining home prices, escalating foreclosures, I don't see much supporting it. Credit card defaults will be the next leg down for this credit crisis to hit the news wires. Very hard for me to be bullish here....buy puts QQQQ