Coach247 wrote: "So I do not over-react to the nonsense and the fear in the markets. Its a rigged game. Just last week we were hearing about the impending collapse of the Eurozone and now its about stability returning. Its all spin. They run the markets higher and suck in the retail schmucks, and then crash the markets to rake in huge profits and go long again. Wash. Rinse. Repeat..."

I've read Doug Noland on an off for years and I took another peek at his latest Credit Bubble Bulletin this week. Fast forward to the closing section "Delta One" for an interesting insight in to how the stock markets miraculously managed to dodge a bullet last week. The ECB's increased response to the ongoing credit crisis couldn't have come at a better moment. According to Noland, stock markets could have taken a turn for the worse if a great number of dealers in outstanding Put Derivatives were forced to cover (sell) in an already rapidly unwinding backdrop. Markets would have nose-dived sans increased liquidity injections, and wouldn't you know it, with this latest derivatives threat out of the way (big boyz have been protected from a nasty hit to the wallet), market futures are already well into the red this evening (Dow off 157 points.) At any rate be wary of the rest of September and here's a teaser from his latest masterpiece:

"Part of my thesis is that the unfolding sovereign debt crisis is different in kind to previous private debt crises. Aggressive (“activist”) monetary and fiscal policies now suffer from increasingly short half-lives. But, at times, well-timed policy measures can appear as powerful as ever.

This week’s move to provide dollar liquidity to European banks will have essentially no impact on the unfolding sovereign debt crisis. But the ECB, in the week following the resignation of German Juergen Stark, showed ongoing resolve in its aggressive crisis response. A bearishly positioned marketplace was forced to run for cover. Authorities, once again, dodged a bullet with today’s expiration of huge amounts of equity market insurance. Fortunately for the marketplace, those that had written these contracts were forced to buy back securities that they had previously sold to hedge their exposure (as the market declined and put options traded “in the money”). With so many “put” option contracts outstanding, the market could have been in serious trouble had the market broken to the downside – with those having sold insurance forced to sell aggressively into a falling market as they “dynamically hedged” their derivative exposures (i.e. attempting to offload flood insurance risk during exuberant downpours). "

http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10575