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RE: Down goes the Dow

Maserati wrote:

Beyond the obvious suggestion, why do you believe the Fed would reverse tapering in such an instance?

DJIA up 125 so far today.

The current administration needs the economy to look as good as possible if they hope to retain the Senate in the November elections. IMO, the Fed is a puppet for the administration and will step in to prevent any major market crash prior to November. Further, I think market traders assume this as well.

After November, all bets are off, especially if Democrats lose the Senate. A collapsing market in 2015-2016 "might" be considered an asset to agitate their base for higher turnout in the 2016 Presidental Elections. The failing economy, pay inequality, low minimum wages, etc, could all be blamed on a Republican-led Senate and House.

I'm not saying this will happen. I'm saying that the Fed has a LOT MORE INCENTIVE to artificially prop up the market until November than after November.

Or I could be all wrong and Yellen is an altruistic public servant who will do what's best for the country regardless of the personal and political fallout. /sarcasm

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