While our clearly oversold markets are catching a bounce off the better-than-expected jobless claims, nothing material has changed to truly give us confidence that this crisis is contained or discounted, let alone over.
We are at the two-week mark in the current stock slump and now more than ever, the leadership void is obvious. Earlier today, investor eyes turned to Europe, where there's now talk of a futile and misguided attempt to regain control by banning short sales. Not only would it not work, it suggests to me that panic has spread to European leaders.
In Europe, fear and contagion are roiling their banks and markets, even as the European Central Bank or "ECB" spends billions of other people's dollars buying Italian and Spanish bonds in a bid to stabilize them. As Macke says, "banking contagion" may sound heady and wonkish, but it's not that complicated given how intermingled our global financial system is. The situation is in Europe is no less muted today with talks of short sales and French President Nicolas Sarkozy pausing his August vacation.
Add in the reality of a U.S. recession, whether it is here already, on the way, or ends up being narrowly averted, the global economy will be weak for at least another two-years. In my view, this was confirmed by our Fed Chief Ben Bernanke on Tuesday.
The leadership vacuum here and abroad is both absolute and astounding. "President Obama is fundraising in New York today as the rest of us are losing funds," Macke quips. This hobnobbing comes just a week ahead of the President's scheduled 10-day vacation on Martha's Vineyard.
So what's the bottom line? Trust and confidence are still absent in today's financial markets.Read More »from Stocks Gain But Trust & Confidence Are Still Lost