This past week has been facinating in the financial markets. After a long slide downwards, the markets tumbled at the beginning of the week, and now they are bouncing back upwards. Initially the market dive looked like it was triggered by worries over the problems with the Monoline Insurers. The Fed responded by cutting interest rates by 75 basis points on Wednesday. This seemed to have little effect with various indices falling even further. It did however seem to have a dramatic effect on the probability that the US will go into recession. On Thursday we found out that Societe Generale lost $7 Bln from trader fraud (leading the market wags to dub it "Shock Gen". This seemed to have little negative impact on the markets with the indices all shooting upwards. They are all up today, albeit not as much as yesterday. It looks like the momentum is leaving the bounce. So could the massive falls be attributed to Soc Gen selling out of their positions and realizing their losses? Can some of the market euphoria be attributed to proposed monoline bail-out? I guess we'll see how next week develops!