There is a Chinese curse… “May you live in interesting times.” (1)
Given the past month, we clearly live in interesting times. Twice this week the market has opened down more than 5% triggering circuit breakers. While these breaks helped, the market still declined.
As of March 12, 2020 the SP500 is down 26%.
On March 3, 2020 the Federal Reserve announced a 50 basis point rate cut and are expected to cut rates another 100 basis points at its March 18th meeting. (2) On March 12, 2020 the Fed announced a $5.5 trillion program to assist in Repo operations. (3)
Yes… $5.5 trillion… The scale of the program is beyond anything ever attempted to stabilize markets.
WHAT ARE THE ISSUES THAT ARE FEEDING INTO EACH OTHER? HOW DID WE GET HERE?