Doug Noland: "Here Comes The Policy Response!"

``Developing economy Bubbles appear increasingly vulnerable to the bursting of the European Credit Bubble.  Speculators, investors and corporations have over recent years positioned for ongoing dollar devaluation versus emerging currencies.  Hedge funds have enjoyed spectacular windfall returns, while U.S. multinationals have benefited from an international profits bonanza.  And while I appreciate the notion of U.S. stocks and our economy as today's so-called "least dirty shirts," I at the same time see the potential for major disappointment and dislocation.  The U.S. Bubble may very well prove resilient -- but I don't expect our risk markets to avoid what is potentially a radical change in the global financial and economic backdrop.  And when things looked like they might spiral out of control mid-week, market excitement was almost palpable:  "Here Comes the Policy Response!" ''