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Stocks closing on their lows is never a good sign, especially on record-breaking down days like today.
The Dow closed down 2,997.10 points – round that up and call it what it is: a 3,000-point loss. Or 12.94%, call that what it is: a 13% loss in a single day. And the Dow closed almost on its lows.
The same's true for the S&P 500 and the Nasdaq Composite.
The Fed cutting the Fed Funds rate to 0% is not a good thing. It smacks of desperation, of a lack of liquidity at big banks. Worse, if the Fed's opening up its "Discount Window" and accepting bad collateral for interest-free loans, which is what they're doing, it's because institutions need liquidity immediately, and some are desperate.
About the Author
Shah Gilani is Chief Financial Strategist for Money Map Press and boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker. The work he did laid the foundation for what would later become the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk and established that company's "listed" and OTC trading desks. Shah founded a second hedge fund in 1999, which he ran until 2003. Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see. On top of the free newsletter, as editor of The 10X Trader, Money Map Report and Straight Line Profits, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade using a little-known strategy. Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on FOX Business' "Varney & Co."