There are many positives today, and we are only halfway through the trading day.
The two big ones:
1) the new fed facility to buy commercial paper is a HUGE move in increasing liquidity in the marketplace. Also important: they are buying 3-month paper, a longer term than most commercial paper, so less rollover pressure.
2) Efforts are underway to launch a trading platform/clearinghouse for CDS. The Chicago Merc and Citadel announced one, there are probably more in the works. One central one would be best, but any clearinghouse will improve transparency.
So...if all this is good news, where's the rally?
It's not happening because confidence has been shattered, and this low-volume, low-volatility day may be the best we can expect under the circumstances.
Why? Because talking to traders on the Street these days is like engaging in a group therapy session:
"Well, Bob, I feel a little better today...but I don't know...
"Sell into the rallies is the only thing that's worked for me...I just don't know...
"There's more shoes to drop with Europe and commercial real estate in the U.S. and other stuff I haven't even thought about..."
"Retail investors keeps withdrawing money...."
"...the big funds don't seem to have enough firepower...
"I'm just really tired and I'm really out of ideas..."
Gads! Buck up, people! Change the meds! The Fed is going to do everything...including selling the White House furniture...to keep the economy going. Coordination between federal agencies is improving all the time.
And Europe? Expect more bailouts...and a few new agencies...and rate cuts.
Bottom line: we are groping our way through this crisis.
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