Fall is coming and along with it the long delayed Global Economic / Financial Collapse; this is a near certainty that we will not get through this year without a major Global Economic catastrophe, greater than 2008's Lehman Brothers collapse.
Reuters: QE3 no silver bullet for markets
(Reuters) - Friday's jobs report that showed hiring in the United States unexpectedly ground to a halt in August is increasing speculation the U.S. Federal Reserve will move to stimulate the economy. But will it help stocks?
Fed action -- if it happens -- is no longer viewed as the elixir for the stock market it once was.
Wall Street tumbled over 2 percent on Friday as investors fretted more about the economic outlook rather than looking ahead to another round of Fed bond buying.
Next week, the question of whether the Fed will step up to the plate with another round of quantitative easing will take center stage with a highly anticipated speech from President Barack Obama. That could make for another volatile week.
This time last year, anticipation of a second round of quantitative easing, or QE2, sparked an almost uninterrupted rally that lifted the S&P 500 around 30 percent from August to May.
What a difference a year makes. Confidence in policy makers is sapping away as the economy languishes, the United States grapples with the loss of its top-notch credit rating, and the European Union seems to be coming undone at the seams.
Wall Street sees an 80 percent chance the Federal Reserve will intervene in the bond market to lower long-term interest rates, according to a Reuters poll on Friday.
But Friday's action in the stock market signaled that equity investors do not see that prospect as silver bullet for their woes. The broad-based S&P 500 index fell 2.5 percent on the day.
"This downdraft is based on sentiment and that has to be turned around," said Brian Battle, vice president of trading at Performance Trust Capital Partners in Chicago. "I think we're in for a longer trend of either malaise or just a down channel."
That means traders and investors who were hoping for a return to normalcy after extreme volatility in August may have to wait a little longer.
Obama is due to address a joint session of Congress on Thursday to lay out plans to create jobs, boost economic growth and lower the deficit.
He faces an uphill struggle when it come to reassuring investors, who fault the lack of consensus in Washington. Heading into an election year, the disharmony is not likely to get better any time soon.
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