Global sell-off crushing U.S. markets

Everything is down hard today after Asia and Europe suffered heavy losses overnight.  The Dow is down 428, the S&P 500 40, and the NASDAQ 80 so far.  Gold is off $80 an ounce.  Copper, silver, oil and just about everything else is getting hit, except for treasuries.  The Fed announced yesterday that the U.S. economy and the global economy, face significant risks, and they announced that they will swap short-term treasuries for long-term, basically trying to buy-down long rates with $400 billion they will get from selling short-maturity paper.  Bad idea.  Rates are already at historic lows.  People and businesses are not constrained from borrowing because rates are too high, they are not borrowing because they have no confidence in the economy and their jobs, and banks are simply not lending.

We have returned basically to the recent lows, and I would suspect that we will once again bounce from here.  I would again recommend long-term investors step in here and buy quality names.  We rallied about 8% from here after the recent correction to get back above 1,200 on the S&P 500, and I expect the same rebound this time as well.  Longer-term, I feel that valuations are very attractive here, even with consideration given to the fact that earnings estimates need to come down somewhat.


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