[Has the drama ended already?]

“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.” Abraham Lincoln

Just two days ago, US market went into a free fall. Analysts were screaming at the tops of their lungs saying the end is near, it is time to bail out and save yourselves! Dow Jones fell 635 points in a single day of trading. One of the worst day for many traders but may be one of the best days for investors. Some of the analysts commented that the Feds is running out of option, Ben Bernanke will lose all his hair in trying to find a viable solution to save the economy.

However, the market started off pretty bullishly today, DJIA registered a rise close to 200 points. So what changed over the past 2 days? Did the Feds found the magic pill for the economy in US? Economists speculated that the Feds will do the following to save US from going into another cycle of recession or worst depression: (Or is it just to save those speculators’ from losing everything in the market?)

1. 1)   The unveiling of QE3 (Qualitative Easing III)?
2. 2)   Maintain low rates or even cut the interest rates down from 0.25 to 0?
3. 3)   Maintain balance sheet at USD3 trillion?

Okay, looks like the Feds doesn’t have much option left to save the market from falling further but how much further will it go before equilibrium is achieved? Do you think that the economy is really in such a bad shape that there are financial institutions like Lehmann Brothers filing for chapter 13 or too big to fall type of companies waiting to be bailed out?

2008 had been a year which helped to trim off the fat on many companies which helped to make them much leaner and versatile. I believed that the economy will grow very sluggishly over the next few years but that does not warrant for a recession. However, I think we can just apply what Abraham Lincoln had said to the market, it doesn’t take any external force to destroy it, just some internal analyst and economist will do.