Wednesday, November 30, 2011

Just your run of the mill 7% jump in 3 days...

This morning I had a sense that something could be coming.  I didn't know what but there was plenty of chatter around the intertubes that something was in the works.  Well, this morning stocks were doused in fuel and lit aflame on news that the Fed was joining forces with the ECB, the Bank of Canada, the Bank of Switzerland, etc to manage the currency markets.  The goal seems to be to strengthen the Euro, and weaken the $. 

There are many different takes on this action but the consensus seems to be that this will buy Europe some time but it doesn't change the fundamental debt situation for Europe.  There was a fairly strong rumor that a major European bank almost pulled a Lehman last night (possibly French?) but they were potentially saved at the last moment.  Perhaps the most interesting bit of information was that the Fed actually voted on this plan on Monday.  So while the major news channels reported that stocks surged on Monday because of some vague shopping traffic stats perhaps someone leaked information regarding this vote to a few key players?  That's a little tinfoil hat for my taste but the move has been so violent that it feels like something was off.

The best rally in years, follows the worst Thanksgiving week for stocks in 80 years, which followed the best October in years, which.....well, you get the point.  Healthy markets don't act like this...


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