The “helicopter balloon” drove stocks higher in July and nothing else seemed to matter. We use that term to refer to efforts by the global elite to float the idea (trial balloon) of the Bank of Japan directly funding government spending (“helicopter money”). The BOJ backed away from the helicopters at its meeting late last week and is taking a wait and see approach for now.
We will see how markets deal with the BOJ’s current reticence and prudence in coming weeks. It also expressed some angst about existing QE policies. That cannot be pleasing to the central bank-loving crowd. Could it be that some of the deciders are growing worried that they have done nothing for eight years but distort markets and capitalism with nothing to show for it? We can only hope so!
It is not hard to see why the QE faithful are growing weary. Last week we found out that U.S. Q2 GDP came in at a scant 1.2% and Q1 was revised down to just 0.8%. Now the BEA says it may have to report unseasonably adjusted data because it can’t figure out what is going on with the numbers. We can only chuckle. Elsewhere, corporate earnings reports and future guidance have been disappointing. Of particular importance, Ford Motor sounded concerned about future car sales and subprime auto lenders are running into credit issues.
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