In case you failed to notice, the Dow shed 500+ points today. For the last two weeks, it has been slowly starting to tank, and today it just jumped off a cliff.
On both sides of the pond, we've accepted a policy of austerity. In other words all our governments are tapped out. Our central banks are basically hidden from scrutiny, after we withdrew reporting requirements.
And after all of this, the value of the private markets are starting to crater. We've lost nearly 10% since this austerity debate began, and now it is hard to see how this doesn't become a panic tomorrow.
All of this, and congress is on vacation. The markets seem to be rejecting the government policy of the western world. This will slide out of control, and the Fed will likely be the only government agency with the will to act.
That action is probably the most dangerous thing we could do right now. By next week, the Fed will consider more quantitative easing, which will destroy the dollar. Quantitative easing is not an emergency action. It is a long term measure taken to balance market forces.
I have no idea what they can do now. We needed to see legitimate legislation, which would begin getting us back on an economic footing. Instead we got political theater, resulting in an ill defined half measure.
Motherfucker!