
Like Cap and Trade and Healthcare, this is underscores the fact that the biggest risk to the markets right now remains government policy error.
It appears that almost every nation's central bank is engaged in supplying emergency funds or funding to their respective financial systems to stabilize the economy. It appears that almost every nation is engaged in re-regulating their economic and financial systems. It appears that every nation has enacted a stimulus program of tax cuts and government deficit spending.
Today Federal Reserve Chairman Ben Bernanke testifies at a House of Representatives Oversight Committee hearing on the central bank's involvement in the Bank of America Corp.'s acquisition of Merrill Lynch & Co.
With much fanfare and questionable outcomes, the Obama administration releases its plan to re-regulate the financial industry. The 85 page document has 5 main areas of new rules for the markets.
The Chinese and the Russians appear to be the point people for driving the conversation as they are concerned over their massive holdings of not only US dollars, but also US debt. Specifically, they are concerned over the massive new issuance of US government debt and the quantitative easing program by the US Federal Reserve.
My overall view remains the same. We will be in a economic relapse danger zone from late June through October. This is when we'll see just how far the global economy will improve after the near death euphoria has waned.
