European bourses were trading lower on Wednesday after European Central Bank President Mario Draghi appeared to hint the ECB would be prepared to scale back its monetary policy amid improving economic prospects for Europe.
Meanwhile, in the U.S., the broader S&P 500 index posted its biggest one-day drop in about six weeks overnight and closed at its lowest point since the end of May. Wall Street’s losses appeared to accelerate on news that the U.S. Senate had delayed voting on a health care reform bill.
When Filia was asked to explain how his ‘fake markets’ theory stacked up with declining global stocks on Wednesday, he replied, “A pullback of 1 percent in the stock market from all-time highs? I wouldn’t call it exactly re-pricing things up. It’s just slowing the pace at which you grow.”
Filia cited “Stein’s Law” as a fitting adage for the state of financial markets at present.
Herbert Stein, chief economist to U.S. President Richard Nixon wrote: “If something cannot continue forever, it will stop.”