DOW Down 512 pts. Today is for the Record Books.
Financial markets have given an unforgettable 50th birthday gift to the President. Today is nothing less than a massacre for stock markets across the world. There are any number of reasons for today’s massacre. Happy Birthday, Mr. President.
The fundamental reason is imploding confidence in sovereign debts, US included. Back in 2008, many market savvy people like Jim Grant and Bill Fleckenstein have predicted what follows the banking debt crisis of 2008 will be much bigger in proportion: Sovereign debt crisis. They have a world that explains Ben style arrogance that he can manage to keep inflating the bubble for ever with cheap credit. Here is my open letter to Uncle Ben.
You claim to be a student of the Great Depression of 1930s and therefore you have better prescription for the Great Recession of 2007. Like you, many others have also studied the Great Depression. But they came to different conclusions. They told you that your QE1 and QE2 are complete waste. You insisted that you will prevail. None of that induced any demand for the millions of homes. Who would buy a house if he doesn’t have a job. All your policies did is help Wall Street fat cats perpetuate their bonus culture. You know that. We all know that. You once again helped Wall Street in privatizing profits and socialize losses.
For the good of people, please do resign.
And European Indices
PS: For a brief period on Aug 3rd, I disclosed my trades on Facebook. I later deleted that post. For, I felt uncomfortable thinking that some people may actually follow me with those trades. If any of you did, please note that as of market close today, I got out of my short position in financials and sold majority of the short position in NFLX. Sure, both trades were VERY profitable. But, I still have a lot of lost ground to cover.