Archived IMT (2008.09.29)

House of Representatives reject rescue package, sending the Dow plunging 713 pts (--6%), S&P500 drops 98 pts (-8%). This is now a US-centric problem, sending the dollar plummeting across the board. Yen longs must be warned from a POTENTIAL FED RATE CUT either tomorrow or tonight, whch would send the yen lower. The Fed's liquidity injections have proven without effect. The market contagion will spread to all over Asia, potentially causing runs on banks if the Federal Reserve does not intervene. Gold prices surged to $920 per ozfrom $870, VIX index surges above 40 to highest level since September 11. Lack of any intervention to send USDJPY to 103.30, EURUSD may surge to $1.4580s, but once again ALERT FROM COORDINATED CENTRAL BANK ACTION. We have already warned in last week's article of an intermeeting Fed cut. Stay tuned.