The Mess That Greenspan Made - Part 414

Whatever Happened to the Bernanke Put?

It would appear that Federal Reserve Chairman Ben Bernanke is doing all that he can to ensure that conditions for both the U.S. economy and financial markets get worse not better. At least, that’s the conclusion that can be drawn from his statement before the Joint Economic Committee today in Washington on the central bank’s outlook for the economy.

Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy. Fostering healthy growth and job creation is a shared responsibility of all economic policymakers, in close cooperation with the private sector. Fiscal policy is of critical importance, as I have noted today, but a wide range of other policies–pertaining to labor markets, housing, trade, taxation, and regulation, for example–also have important roles to play. For our part, we at the Federal Reserve will continue to work to help create an environment that provides the greatest possible economic opportunity for all Americans.

Unless he says something in the Question & Answer session to contradict this dismal view of our current condition and an expressed  unwillingness for the Fed to act, it would seem that the helicopter fleet is permanently grounded and markets shouldn’t expect the printing press to again be summoned for the greater good.

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Rolling Stone’s Matt Taibbi talks to Keith Olberman about the Occupy Wall Street protest that appears to be gathering national attention at a blistering pace, not yet rising to Tea Party status in the eyes of the mainstream media, but possibly on its way to doing so.

In Griftopia, Taibbi lamented the “hijacking” of the Tea Party movement by the Republican party that shifted the focus to government spending and taxes, rather than the more fundamental problems that have resulted from the financialization of America.

Though criticized for a lack of focus or clear demands, one thing seems certain, the Occupy Wall Street crowd at least has their fingers pointed at the right group of people.

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Tuesday Morning Links

MUST READS
Global Shares Tumble on Greece Fears – NY Times
Eurozone delays decision on next Greek payout – BBC
Obama’s jobs bill falls to pieces in Congress – Reuters
Greek Leader Papandreou Not Prepared to Resign – BusinessWeek
America’s Debt Crisis: Why Europe Is Right and Obama Is Wrong – Spiegel
How Big Business Influences The Super Committee – 24/7 Wall St.
China’s Fall, Not Its Rise, Is the Real Global Threat – Bloomberg
A new Lost Decade is leading to revolution – MarketWatch
Occupy Wall Street Could Be Beginning Of Social Movement – HuffPost
Declaration: Occupy Wall Street Says What It Wants – ABC News
Protesters set up camp in front of Los Angeles City Hall – LA Times
On Wall Street, a Protest Matures – NY Times

MARKETS/INVESTING
Oil near $76 as Greece crisis gnaws at confidence – AP
Gold climbs as Greek default fear hits shares – Reuters
Breaking of lows could trigger more selling – MarketWatch
Gasoline prices are high for this time of year – LA Times
CME to raise max gold collateral level to $500 mln – Reuters
Savers turn to gold while between a rock and a hard place – Mineweb
Senate votes to allow debate on yuan bill amid China’s opposition – xinhuanet
China says “adamantly opposes” U.S. senate currency bill – Reuters
Goldman Sachs Cuts Brent, Copper Price Outlook – CNBC
10 Questions for the Bulls – The Street

ECONOMY/WORLD/HOUSING/BANKING
To Cure the Economy – Stiglitz, Project Syndicate
Goldman Cuts Global GDP Growth Estimate – Bloomberg
Economist: Asia’s Similarities to 2008 ‘Striking’ – CNBC
Factory slump and Greek debts bring double dip closer – Guardian
No inflation respite for Asia despite price drops – Reuters
Swiss Head for Bunkers in Case of Euro Fall-Out – WSJ
Euro Crisis ‘Could Become a Global Conflagration’ – Spiegel
The Ticker: Housing Market Failing to Clear – Bloomberg
Housing Market Divide: The Rift Between The Haves And Have-Nots – Examiner
Lacker Says Fed’s Operation Twist Won’t Spur U.S. Employment – BusinessWeek
Bernanke Put Not Worth Much These Days… – DeLong, GRBH
Fed-led chaos deepens – Asia Times

 

October Not Off to a Good Start

Well, it looks like October might not be any better than August or September for stocks as, after a big 241 point move down on Friday for the Dow, new jitters over a Greek default sent the index down 258 points today and traders are sniffing out a new bear market.

While emerging market stocks have been in a bear market for some time now and the small-cap Russel 2000 just entered one late last month, so far, major U.S. stock indexes have resisted the bear market siren call of short sellers – both the S&P500 and  Nasdaq are now down 19 percent from their highs earlier in the year while the Dow is down 17 percent.

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