Helicopter Ben

The press and CNBC mouthpieces seem almost unanimous that Ben Bernanke will dump cash on the economy at today’s meeting.  I would be very surprised if that occurs.  He seems, by all indications that I see and read, attempting to stay above the political firestorm that will unfold into the fall elections. 

Help for the economy and employment, if any occurs, will need to develop from structural and fiscal initiatives based on creating incentives for job growth, not the desire to increase the bank balances of the S&P 500 and the wealthy two percent.  This will require Democrats and Republicans to work together and I see no sign of that.  As such I remain with a bearish bias on the economy and the markets.

The problems in the economy remain a legacy issue of the attempt to bail out of the 2001-2002 recession by throwing funny money at housing.  Those houses are built and someone will own them at a price, but that story is not over.  It weighs on household debt for two reasons, homeowners paid too much for their houses and did it with sloppy financing and those who had houses borrowed against their equity.  We have a broke consumer who has to work out the problem.

Leave a Reply

Your email address will not be published. Required fields are marked *

one × two =