Well Fed bailed us out again. Only this story has not worked in past few months so there is much to be seen. I think there has been some real pain over the past 2 weeks that may take longer to heal. My bad days were over a week ago. I had several puts expire worthless or I sold them Monday and Tuesday last week only to see them triple or more in value in the 3 following days... Timing is everything and I have been trying to short this market for months only to have the Fed bail it out over and over. Needless to say, I have had marginal success since September. It seems they are looking at my cards. All was great until the big fall bounce which came out of nowhere and should have never happened. Still trying to figure it out.
Anyway, If we really do get another .50 cut in a week the Fed will have made a really big mistake, bigger then the radical rise for 18 months (from 2004-06) and subsequent market bail out moves since. The US overturned the banking laws enacted in the 1930's here in 1999. It only took a few years for Wall Street to make a mess of finance again. I cannot believe the rest of the world, especially Europe, fell for the same thing they fell for nearly a hundred years ago, buying garbage debt and debt products from New York money centers (I cannot bring myself to call these organizations "banks". It would be an insult to the term.).
They all deserve to take their losses big and the Fed is making a big mistake flooding the markets with liquidity and dropping rates in big moves.
Having said all this, I learned a long time ago (although many time tested strategies have been destroyed lately), you cannot fight the interest rate move.
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