Since the plunge in late July to August, this "market" has been nothing short of a wild ride. Even Bernacke can't seem to assuage investors as every headline out of Europe garners some type of over-reactive response from market participants. Then again I think much of these violent swings are due to government intervention. Absent government intervention we would probably already be on our road to growth. We would have purged the system. The risk takers who created this mess would be gone, and the market would allow the pieces to be picked up by those who played it smart. That is the premise of the market. Supply and demand. Once the goverment meddles with it, it just isn't a market anymore, hence the wild ride we've seen since QE2 ended.
The FED is still meddling, and in the press conference this week Bernanke all but assured QE3, which accounts for the rabid buying we see on any and every dip this market takes. The expectations world wide, by every investor is that the markets will always be backstopped by the central banks. There is no risk. The risk since March 2009 is missing out on the next centrally planned run up in assets, most notably equities. Bernanke was telling everyone this week to be careful with your money, yet he's forcing EVERYONE into risky assets.
Ben Bernancke makes Corzine look like a genius and I do believe down the road, years from now, people will wonder how we ever believed a word he said. A red cape is all he needed for his devil costume this Monday.
As far as this weeks wild ride.... its great for options traders and I don't see this slowing down anytime soon.