As you would expect, the world’s biggest banks are doing everything they can to prevent the global economy from slipping into a recession. That much is obvious when you take a look at the desperate moves they’re making.
But the more important issue to discuss is that their actions are no longer having the intended impact.
So what happens when more and more investors realize that the banks are no longer in control of the future of the market…?
If all you did was look at any benchmark index for the US stock market, you’d might think we’re in a great position to continue the aging bull market. But of course, that tells a very tiny fraction of the story…
What you should really be looking at is how the ones who normally hold al the cards – the big banks – are reacting to the current state of affairs.
And right now you’d have to label them as desperate.
The first thing to note is that the US is holding up better than the rest of the world right now as it relates to the financial markets.
But US investors have to be worried about the global economy, with trouble in Europe and Asia, pulling the domestic market down with it.
And as we’ve been documenting, it appears that we’re already emerging into a brand new bear market right now anyway…
It’s just a matter of time.
And the gravity from elsewhere in the world trying to pull the domestic market down is only growing…
Last week, the European Central Bank announced a stimulus plan to boost the European economy. This kind of beefed up plan is the sort of thing that was able to keep the long-surviving bull market raging on in recent years.
But last week it was met with a brief rally before turning downward again in the same day.
And what about Japan?
Its big desperation move was actually turning to negative interest rates. Designed to stimulate the economy by promoting exports on a cheaper yen, the negative interest rates provided a short-term boost to its benchmark market index, the Nikkei 225. But the same index is down just several short weeks later.
Slowly but surely, investors are beginning to realize that the big banks of the world are losing their power to turn around economies.
The next question to ask is, when the fears of a global recession are realized, how far down will the stock market fall?
