What Could Cage the Bear

BUSINESSWEEK— An aggressive Fed can blunt its bite. And so can foreign investors in search of bargains. Bear markets are always difficult to predict, but this one is straight out of The Twilight Zone. Barely a year ago, market watchers were wringing their hands over the reckless ascent of Chinese stocks; the profligate bond terms being extended to banana republics; the lust for all things emerging market. Surely, said the experts, a snafu in some far-flung place would bring the global stock market bull to its knees. The U.S., of course, would be the redoubt of quality.

Not quite. Foreign markets are swooning all right, but on fears over what’s happening stateside. The supposedly steady U.S. market has been a basket case, dipping on Wednesday morning to 19% below its October high. (O.K., quibble if you must that the bear market threshold is 20%. But what’s a percentage point among friends?) Despite the midweek rally, stocks are down a sickening 9% for the year. Read article.