Ottawa doles out $60-billion in tax relief

This week, on Thursday, February 14th, Bernanke spoke, markets fell. Confidence in the Fed Chairman wanes. From a fundamental perspective, until something is done to bail out the credit insurers, so they maintain their AAA rating from Moodys and S&P, market rallies will be corrective. This is an economic nuclear bomb at 32,000 feet This is about bank solvency, bank risk-based capital, the bank credit function, not about the insurers themselves. Should a downgrade come to the insurers, billions of municipal bonds will effectively become illiquid, joining the trillion of CDOs (mostly subprime loan securities) that have already become illiquid. Without a bailout here, we are headed for a depression. Period.

None of this is lost on the markets. Technical analysis doesn't predict the news, it just recognizes those periods (Bear markets) when a cacophony of bad news, macroeconomic screw ups, frauds, etc... read more