Posted on 06/07/2013 5:58:55 AM PDT by blam
MIKE O'ROURKE: Here's The 'Bearmageddon Scenario' That Would Be A Nightmare For The Stock Market And Bernanke
Joe Weisenthal
Jun. 7, 2013, 5:23 AM
Strategist Mike O'Rourke of JonesTrading has a section of his latest note describing the "bearmageddon scenario" for stocks and the Fed.
He doesn't say that this is his base case, but he thinks it's worth pondering a possible path forward that sees the economy weaken, and the futility of QE exposed, boxing in everyone.
He writes:
The Bearmageddon Scenario is one where the economic data rolls over and turns negative. The reason we are mentioning it today is that this week we have received a sub-50 ISM Manufacturing report. The last two major bear markets coincided with consecutive monthly sub-50 ISM prints. That has yet to occur, but it is something to be cognizant of. Although we don’t have confidence in ADP, if it is signaling weakness in tomorrow’s report, it would be a problem. A Non-Farm Payrolls print around that 100,000 or less level about which investors are concerned would be a real problem. After 18 months of multiple expansion, modest earnings growth driven by buybacks and full throttle monetary policy, a substantive weakening of economic data would be disconcerting to investors. With zero interest rates and $85 billion a month in QE, how would the Fed respond to new weakness in the data? More QE? New weakness would just expose QE3 as a failure. It would also confirm the Fed has wasted the past couple of years relying on QE. We do not doubt Chairman Bernanke’s ability and creativity to devise a strategy to tackle weakness, but it would take some time as it did in 2008.
(snip)
(Excerpt) Read more at businessinsider.com ...
Another day, another prediction of stock market disasters lurking around the corner . . .
Tune in next week viewers, same Bat time, same Bat channel.
The economy will roll over ,, right now it’s like a small swamped boat being rocked by the waves... If we kill Obamacare there’s still a chance but I don’t see anyone with balls enough to cut off funding or kill the implementers (IRS) ... if Obamacare goes forward then we have a nation of part timers and an further explosion on people claiming benefits , a huge erosion of tax income to the treasury and no consumers to buy anything... fear will do that and this is not baseless fear.
The biggest problem is that the rest of the world is out of gas too... we were the engine pulling them along for decades , our tandem engine ,Japan , has been dead for 20 years... the boiler is rapidly losing steam and the fire is weak.
John Galt is witnessing the lights going out in New York.
Here we are....watchin a slow-motion train wreck as full time employees are being replaced with part time employees. The number of employed workers goes up, but the income of workers will go down, sinking an economy dependent on consumer consumption.
Bernanke has propped up the Wall St. gang that got us into this mess because they were “too big to fail.” No one cares about the struggling Middle Class that has seen its income shrivel 15% since ‘08.
I wish Joe would make up his mind - are things getting better or are things getting worse? Good grief.
When you figure out who can be believed, please let me know.
Yeah and in the interests of economy the chocolate ration is increased from 22 to 20 grams......in other news Obama was surprised to learn in the newspapers that the 2016 election has been cancelled for further economic reasons.
Manufacturing payrolls fell by 8,000. Economists were predicting a gain of 4,000.
U know what they say.
A recession is when your neighbor loses his job.
A depression is when U lose yours!
Methinks that one of the ways to end depressions is if ALL THE ECONOMIST HACKS LOST THEIR JOBS!!
;-)
Just when the nation was beginning to move away from naming every little dust-up “thing-gate,” we now have a new trend to name every potential problem, no matter how small the odds, “thing-mageddon.” Please, Lord, endow your writers with the necessary skills to not use such such banalities when they ply their trades.
lets think this over.....Obamacare penalizes employers that have full time employees......
I cant for the life of me figure any correlation between the two...Can You??...../s
No one would pay me for saying that the next flip of a coin might come up heads, but then again it might come up tails.
However, economists get paid big money for saying exactly the same thing.
lets think this over.....Obamacare penalizes employers that have full time employees......
****************************************************
Obamacare also penalizes employers that schedule employees for 28 or 29 hours a week to avoid the “new normal” fulltime definition of 30 hours because they are “gaming the system” ,,, so employers will be forced to cut all their full time employees down to 20 hours....
DuH??
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.