When times are rough, you need a hug. A little feel-good lovin', a little TLC - or TARP, whichever the case may be.
Yes, we've had a little loving. Rampant rolling in the hay even. The bulls have indeed come out to play. Better than expected earnings, encouraging GDP figures and, of course, our recent dose of central bankers smiling at us from a Hole with cautious optimism and promise of low interest rates.
You need a little lubricant for any worthwhile action. The hotter the better, the hotter the wetter. And nations across the globe have been providing by the trrrrillions (how easily it rolls of the tongue, how painful to debt to GDP ratios).
GDP figures from Germany today showed how the economy was lifted out of the worst recession since WW2 by government stimulus (cash for clunkers, German-style mostly) and it's been QEQEQEQ across the board while governments tried to get consumers wet and spending.
The governments might buy you a round or two while you get things together, but by year-end you'll be paying 26 points on your TARP (the equivalent of trying move home while you sort your life out only to realize that your first priority is now to move out - ask Goldmans with their repayment and bonus bonanza).
The easy money that got us into this mess (say corporates/your chums buying you a round of Cristal and coke) has now got countries (say your parents) buying you beer and condoms.
Yes, it's not quite as lavish as it used to be, but it's more of the same sleazy liquidity getting us into bed. This kind of loving is the same kind of prolonged stimulated pleasure as bedding a bird with alcohol. I have no qualms about rampant sex and easy access to liquidity, but even with all the liquidity that's going in to soften the lack of action and get some going, my question to all those men in the Hole and especially Mr Bernanke: now that you're staying with us for another term, HOW LONG CAN YOU KEEP IT UP?
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