So - I posted earlier about the Fed’s shocker cut this week. It turned out to be an amazingly volatile week for the global markets- 1 day in the US - the Dow had a ~600 point swing (that is around the 3rd biggest % swing day ever for the Dow). The Hang Seng was down ~10% one day, up 5%/ 6% on other days. The Stoxx 50 had similar volatility - just huge global markets volatility.
Also Societe Generale Reports EU4.9 Billion Trading Loss.because of a rogue, evil, bad, no-goodnik trader. Shocking in and of itself. This morning I was reading John Mauldin’s weekly markets newsletter. He points over to a Financial Times article “Markets ask if the Fed was duped?”. Essentially - the idea is that - SocGen accounted for some 10% of the market action as it unwound its evil, bad, wrong way trade… thus driving down the global markets.

It is not supposed to be the Fed’s remit to manage the stock market - so there is plenty of criticism of the Fed for seemingly reacting to big down futures prices and downtrending global markets. Via Big Picture or Seeking Alpha - you can see the same article titled “Fed’s Folly: Fooled by Flawed Futures”. It says basically the same stuff - why is the fed reacting to the futures pit? Too bad we did not know Soc Gen was unwinding a mega fraud position. As I put said the other day - so much for the decoupling in global markets.

John Mauldin goes on to say he thinks the Fed believes the bond insurers are in more trouble than most think, etc, etc. Perhaps the Fed move will have helped us or not -either way - it is all amazing stuff. Dram of a global scale.

-Chris

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