Familiar pattern in the stock “market” these days. Take a hit off the central bank pipe & get all amped up, then crash, slumping along until that next fat rock comes. Well, this time rather than just the neighborhood dope man the whole damn cartel practically showed up:
The Federal Reserve and four other powerful central banks threw a lifeline Thursday to Europe’s struggling banks.
The European Central Bank — along with the Fed, the Bank of England, the Bank of Japan and the Swiss National Bank — announced a coordinated plan to pump dollars into Europe’s financial system. The aim: Provide U.S. dollars to European banks that need the currency to fund loans and repay debt. […] U.S. stocks rallied as did European markets. Britain’s FTSE 100 (UKX) gained 2.1%, the DAX (DAX) in Germany added 3.2% and France’s CAC 40 (CAC40) rose 3.3%.
Consider for a moment the scope of intervention here. Virtually an entire continent is being bailed out, yet the gains aren’t particularly crazy even for the megabanks who were the entire point of the intervention. From there, it was already a given the real economy would receive jack squat, but when the effects at the top are likely to be wiped out in a week there’s really nothing to ask for in the first place.
That’s the rub over economic issues that are clearly structural in nature: when you deny that reality, anything you do in response is always Not Enough.