Yesterday, stocks rallied on a failed US Treasury auction. After a failed attempt to rally again today, stocks have collapsed. Dow is currently down about 100 points, but still maintaining a level above yesterday's lows. I think that with QE2 coming to a close in less than 7 weeks, the markets are anticipating the potential for malaise that had prevailed over the past three years each time the Fed has stopped monetizing the debt!
Yesterday, I read interesting analysis by Chris Martenson that suggested that about 2/3 of the volume of the stock market during QE2 was due to money creation by the Fed. That's doesn't make me feel warm and fuzzy going forward.
