Now in Post-bubble Era as Financial Industry Bombs Out

By Bill Bonner • May 11th, 2009
The important news:

Yesterday, both the Bank of England and the European Central Bank announced moves to boost the economy. They're both falling in line behind Mr. Bernanke, who is "pulling out all the stops" in order to avoid a deep depression. Both the BoE and the ECB are going to take up forms of QE - quantitative easing - in which the banks buy government debt directly.

Don't try QE at home, dear reader; you'll be arrested for counterfeiting. QE so closely resembles old-fashioned printing press money that you couldn't tell them apart in a police line up. Both are ways to increase the supply of money...which, according to theory, leads to consumer price inflation.

The Dow fell 102 points yesterday too. The bear market rally has gone on for nearly 9 weeks. It's probably ready for a rest...and maybe a pullback. We doubt it's over though. There is still far too much money and far too many suckers who have not been pulled back into the stock market. The next leg down of this bear market will have to wait - most likely. (more)