The bear roared today, ripping the ears off everyone, as the Dow and Russel 2000 both landed more than 20% below their last peak. Their 19-session rampage landed a record as the, steepest, fastest downhill bear run in the history of the US stock market.
The market’s waterfall run over the cliffs now looks like El Capitan.
Of course, the rise of the bear also means the “longest bull in history” just died today, and it died in spite of the Federal Reserve’s most heroic efforts to turn up the bulls life support by any means.
Linda Zhang, CEO at Purview Investments, gave the bull’s eulogy in the late afternoon:
This bull market will go down in history as the one that nobody believed would last this long. A lot of people have been hurt because their retirement money disappeared…. What brought us to where we are in 2020 is too much hope, sky-high valuations.
As if to underscore everything I wrote in my latest Patron Posts about how impotent the Fed has become, the bull died today just as the Fed cranked up the voltage on its repo-QE defibrillator for the second time in just one week. On Monday, I noted how the bull dropped to its knees when the Fed administered a double dose of its interest cuts the week before and how it fell to its side on Monday when the Fed increased its historically massive overnight repo operations by 50% from $100 billion to $150 billion. (See, “Dow Crashes 2,000 Points in Record Day! The Bear is at the Door.“) Well today, the Fed cranked the voltage of its overnight repos to $175 billion to try to stabilize the bull fibrillating heart, and bull died completely. Fed medics also offered two epinephrine shots totaling $95 billion in term repos today, but the bull didn’t stir. The “longest-lived” bull in history was pronounced dead at 4PM eastern daylight time today.
Read the rest here: https://thegreatrecession.info/blog/stock-crash-into-bear-market-beats-1929/