FED will cut rates: otherwise it is a "suicide option" for their friends: now it is apparent that domino bailout is in effect on the Wall Street. We still have room to go sharply down on fear metricks VOX, VXN, VIX.
Lehman Brothers LEH has filed for bankruptcy - FED did not protect it, Merrill Lynch MER is bought by Bank of America BAC for 50 billion, American International Group AIG is looking for 40 billion FED life support. Only chosen few will be saved - others will fight for themselves, financial assets will be unwind in the falling market. Selling pressure will add to selling pressure: FED needs buyers to prevent collapse, chosen few will get money with negative rate of return to taxpayers.
Last stage of operation should come into play: FED cut rates, awash market with liquidity, PPT will buy in the open market financial equity. They will try to talk all other central banks into rate cuts.
ECB, BOE to Pump Extra Cash Into Strained Money Markets
Anyway if systemic risk will be addressed by operations like BAC buying MER, US Dollar will go down and Gold will fly, against falling dollar and all other FIAT currencies. Ten global banks has created 70 billion dollar loan facility: time is not to fight the USD collapse, but to fight for financial system existence.
Today's action in Gold, Silver and commodities will be very important. Will Goldies finally decouple from financial economy mess and become new backbone of the Recovery?
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