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What Causes Fed To Hit the Panic Button?

By Lawrence  

1998 Russian Bond Crisis

Back in 1998, there was the Russian bond crisis. Following is the S&P500 daily chart at the time.

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Well, everything happening in Russia was no concern for Fed since July 1998. Not until late September that year when Long Term Capital Management was in so much trouble a bailout was needed.

And PPT was hard at work to stop the consequential fallout in early October 1998 affecting the stock markets worldwide.

 

2007 Lehman Crisis

Back in 2007, there was the Lehman crisis. Following is the S&P500 daily chart at the time.

image

Again, Fed did not care how leveraged the banks were at the time (not even now). Yet, when Lehman was facing a wipe out scenario in Aug 2007. Someone worked hard again to stop the stock market from dropping in mid August that year.

 

2014 Who Is The Troublemaker This Time

In 2014, we have this 10% correction into mid October which is perfectly normal for a normal stock market. Yet everyone knows it is not a normal stock market. Following is the S&P500 daily chart.

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Someone worked hard again to force the stock market to bottom out at 10% correction level. Every one knows who that is.

But why? For the last two crisis, no one knows exactly what were done back then until several years later.

One thing we know for sure though. Since the signature of PPT is there just like the last two panic buying, we can guess with confidence that some big ass firms probably in so much trouble that Fed is again forced to act.

The juicy details of this event will be told in the future, when they have decided to let us know.

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