A “wheelchair economy”: What happens when Uncle Ben stops pushing?

A Wall Street Journal article points out some of the obvious things that the cheerleading mainstream media is missing: The economy is so weak it’s in a wheelchair. And what happens when Uncle Ben stops pushing it uphill, with his generous stimulus program? Look for the wheelchair to start rolling back down the hill . . .

By Paul Vigna

The hot-stock boys really better hope Bernanke does his Gentle Ben routine next week. Keeping track of the fundamentals is a thankless task these days. The stimulus policies of the Federal Reserve and the world’s other major central banks have rendered most of what passes for fundamental news and analysis moot. Weak earnings, weak wage growth, weak job growth, weak earnings growth – none of it has matter to a market that has a Pavlovian attachment to central banker pronouncements.

The last three weeks have been a cold cup of water in Mr. Market’s face. The weakening global trends have affected everything from IBM‘s IBM -0.77% sales in China to the price of coffee in New Jersey. If traders can no longer reliably count on easy-money policies from the world’s central banks to boost asset prices, they will be forced to fall back on fundamentals. They will not like what they see.

Earnings growth for the S&P 500 companies has been languid the past several quarters, and sales growth has been worse. The second quarter comes to an end in a little more than two weeks, and a number of companies have already started previewing what quarterly numbers will look like. The advance peak isn’t pretty. Of the 110 companies that have Continue reading

Is that a pin near the market bubble?

From the New York Times: After the financial crisis of 2008, the Fed moved into emergency mode to lift the economy and support the banking system. The central bank has bought more than $2 trillion of bonds, effectively pumping that amount into the banking system and economy.

and

“Just what was Ben S. Bernanke thinking three weeks ago when he said that the Federal Reserve might soon cut back its stimulus efforts? . . . Since May 22, when Mr. Bernanke made those remarks, global stock markets have lost $3 trillion in value . . .”

 

Greek stocks falling; good for silver and gold?

Greece has been in the background, lately, but now the country’s economic mess may again impact world and U.S. markets. Which could in turn make silver and gold look like a great safety move. From the Wall Street Journal today: “Greek stocks fell sharply after the country failed to attract a single bid for Depa, a natural-gas company it is selling, a significant setback to its effort to raise billions of euros from the sale of state assets this year.”

Asia in the red tonight

Big losses brewing

Country: Index Last Change % Chg
Asia Dow 2866.99 -30.52 -1.05
DJ Asia-Pacific TSM 1337.43 -17.86 -1.32
Australia: All Ordinaries* 4771.80 -53.40 -1.11
Australia: S&P/ASX* 4781.20 -54.00 -1.12
China: DJ CBN China 600 21397.44 -230.94 -1.07
China: DJ Shanghai 290.89 -3.26 -1.11
China: Shanghai Composite 2248.15 -22.78 -1.00
China: Shenzhen Composite 1002.49 -10.11 -1.00
China: Shanghai 50 1786.21 -20.61 -1.14
Hong Kong: Hang Seng 21834.87 -234.37 -1.06
India: BSE Sensex 19453.67 -114.55 -0.59
India: S&P CNX Nifty 5890.45 -33.40 -0.56
Indonesia: JSX Index 5001.22 -20.39 -0.41
Indonesia: JSX BISNIS 27 409.34 -3.33 -0.81
Indonesia: JSX Islamic 674.40 -2.95 -0.44
Indonesia: JSX LQ-45 831.09 -5.63 -0.67
Indonesia: PEFINDO-25 543.70 3.26 0.60
Indonesia: SRI-KEHATI 264.35 -1.76 -0.66
Japan: DJ Japan TSM* 666.45 -12.72 -1.87
Japan: Nikkei 225* 12904.02 -110.85 -0.85
Japan: TOPIX Index* 1070.77 -19.26 -1.77
Malaysia: DJ Malaysia TSM 3389.55 -11.00 -0.32
Malaysia: FTSE Bursa Malaysia KLCI 1771.22 -3.20 -0.18
New Zealand: NZX 50* 4455.33 1.75 0.04
S. Korea: KOSPI* 1959.19 -30.32 -1.52
S. Korea: KOSPI 50* 1685.11 -26.61 -1.55
S. Korea: KOSPI 100* 1945.74 -30.31 -1.53
S. Korea: KOSPI 200 Composite* 256.51 -4.03 -1.55
Singapore: FTSE Straits Times 3194.13 -49.30 -1.52
Taiwan: TAIEX* 8096.14 -85.77 -1.05
Thailand: SET 1497.96 -24.70 -1.62