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CAD down 3%

What a night, first I'm not sure what the Street was expecting from the Feds!  In fact, the Feds delivered exactly what most economist had assumed to be the plan:  Twist; whereby the sell short term T-bills and buy long dated one (last tested in the Kennedy Administration) as a means of changing the shape of the yield curve.

For Canada, the implication was severe overnights, yields have tightened, the stock market is off nearly 4% (taking Canada back to August 2010), the CAD is down nearly 3% (down to 0.97/1.03) but then oil prices are down 5% for the day.

Good old fashion panic is in the air, the French banks are in melt down, European banks are increasingly unable to fund themselves, BAC and WFC have both been downgraded.  Screaming, crying the world is ending... not really!  Over the past year we've had a bear market rally, and now the bears are back!

Watch earning forecast for S&P500 companies; in January the figure was $105, then in April it was $95, its now slipping to the high 80s, it could be around $70-75 by November -- that says S&P500 at 900/1000 and not 1,450 (what the analysts were predicting in January)

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