BEHIND THE MONEY: Don't Expect Jedi Council-Like Solution From G20 Leaders This Weekend
Some traders have cited optimism about the G20 meeting of world leaders in Washington this weekend as one reason behind the monster rebound yesterday. There is some speculation about a substantive announcement involving nations that run a surplus providing loans to countries hardest hit by the credit crisis.
The Hollywood-like image of world leaders sitting around a table ala Austin Powers, Dr. Strangelove or the Star Wars' Jedi Council and coming up with a plan to solve this deep, complex and heterogeneous crisis seems a bit too far fetched for traders.
"You have 20 nations there and a five-hour meeting," said Tim Seymour, founder of Seygem Asset Management and a FM Trader, "That leaves 15 minutes for each leader to speak. How much can you get done in 15 minutes?"
What Seymour does expect to happen is a "plan to create a bigger plan" with working groups created to tackle different aspects of the crisis. Look for more symbolic action, rather than a global coordinated effort that the U.S. wouldn't participate in anyway, he said. You can see some of Tim's trading thoughts on a daily basis on Seygem Asset Management's website.
And yes, we were incorrect in this blog yesterday in calling for the market to breakdown. It did in fact break the lows significantly. It also snapped back by a violent 900 points in a flurry of panic buying. Traders these days can be right about a call and still be broke by 4 pm. It's what bear markets do and as OptionMonster.com's Pete Najarian likes to say these days, "If you don't have real-time quotes, you're dead."
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