The revised GDP # for 2Q/2011 was released today as 1.0% growth. That was lower than expectations of 1.4%. That follows 1Q GDP of 0.4%.
Welcome to Japan, boys – 1% or less interest rates, a large and rapidly growing national debt, a poor stock market and awfully slow economic growth with no end in sight. All the criticisms over the last 20 years about Japan’s various supposed policy errors and weak regulation of banks rings pretty hollow today, don’t they? Let’s hope our troubles don’t last the 20-something years theirs’ have.
Ben Bernanke’s speech text was released at 10am and as there was nothing on quantitative easing of any sort, not even technical issues like swapping current Fed holdings for longer maturities. Immediately the market sold off sharply only to reverse course and go up sharply.
What’s going on? Some participants sold because there was no good news in the Bernanke speech but once the market got down to a short-term support level, buyers came in and short sellers were forced to cover, which means they had to buy.
Stocks are up 1.4% – 2.4%. Volatility remains high. Gold is up and so are bonds.
All is quiet on the western front of Europe today. Markets there were mixed, with the UK positive and Germany down -1.6%. Asian stocks were down.