I just finished looking at the markets in Asia. Their week is certainly starting with thumping as Japan and Korea are down more than 2% and 2.5% respectively. Given the housing fears and the weak jobs report in the U.S. on Friday, I am not surprised. This week could be very interesting here in North America as well.
I do not think a 25—or even a 50—basis point cut by the Fed will make much difference. From some of my readings, any uplift in the markets after a rate cut will simply be an excuse to get short(er). Although I do not expect any rate cut to have a material impact on the economy, I am curious how the markets react to the uncertainty and to the anticipated rate cut on September 18th.
In summary, I think this week might be even more volatile than we have recently experienced. The reality or gravity of the housing situation is beginning to penetrate the markets and pundits all trying to anticipate how much Bernanke will reduce rates and when. The next two weeks promise to be interesting.
Calgary model Judith Aldama is featured in the photograph, which is hosted at Flickr. If you click on the picture of Judith, you will be taken to where you can view a larger version and see even more pictures of her.
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