What a day! Before the market opened, the Jobs Report was unexpectedly strong, and the Dow went up 172 points. As the morning passed, that euphoria also passed as the mounting fears of European sovereign debt increased. The Dow lost all 172 points and then lost another 245 on top of that, a spread of 417 points. At mid-day, the European Central Bank (ECB) announced they would begin buying bonds of Italy and Spain, which is essentially quantitative easing for those members of the Euro-zone who are "too big to fail and too big to bail." After that, the market bounced up and down all afternoon, finally ending up 61 points. Although it was the worst week in the last two years, losing 5.7%, it still ended on a surprisingly good note.
I applaud the ECB's action today and hope they will become more imaginative, as well as protective like our Fed. The first step in a twelve step program of recovery is to admit the problem. I think the ECB did just that today. Now, the risk is that they will use a .22 pistol when they need a bazooka! We'll see . . . as soon as the floor stops moving!
