Courtesy of Pam Martens and Russ Martens
Wall Street Mega Banks Are Highly Interconnected: Stock Symbols Are as Follows: C=Citigroup; MS=Morgan Stanley; JPM=JPMorgan Chase; GS=Goldman Sachs; BAC=Bank of America; WFC=Wells Fargo.
Investors Might Be Forgiven for Feeling Like Anne Heche in the Movie Six Days Seven Nights
Market action since the Federal Reserve’s first, in a promised series, of rate hikes on December 16 to put the U.S. back on a path of “normalization” and end its seven-year zero-interest-bound policy has reminded us of that line from the movie “Six Days Seven Nights.” Actress Anne Heche goes on what was supposed to be a pre-honeymoon vacation to instead experience a plane crash, be held hostage, and fight for her very survival. At one point she says words to the effect: I don’t know how much more of this vacation I can take. Investors might be forgiven for feeling the same way about the Fed’s idea of “normalization.”
What U.S. investors woke up to this morning was another day of market hell. Futures on the Dow Jones Industrial Average were showing a loss of more than 300 points; Europe and Asia stocks had been pummeled overnight; and domestic crude oil (West Texas Intermediate) had sunk to a new 12-year low under $28 a barrel. According to Bloomberg News, on a global basis, as measured by the MSCI All-Country World Index, stocks have now lost over $15 trillion since May.
As for the Fed’s ability to get interest rates moving back up, the 10-year U.S. Treasury note which closed at a yield of 2.29 percent on the day of the Fed’s rate hike announcement on December 16, has this morning broken below 2 percent to trade at a yield of 1.97 percent.
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