As with the guarantee of death, taxes and the passage of time, in the new era of central banking we’ve seen central bank activism whenever something goes wrong. This week we’ll hopefully get details from both the ECB and the Fed on what they’ll do next but its clear with Spanish and Italian bond yields at such elevated levels, the ECB can have an outsized influence on current markets. The Fed on the other hand is acting just to act, not because anything incremental they’ll do will actually help. Spain’s economy officially contracted for a 3rd straight quarter in Q2, this time by .4% q/o/q. In Asia, markets rallied across the board except in China where the Shanghai index can’t get out of its own way, falling again to the lowest since Mar ’09.
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