I saw no news today that changes anything in my thinking. Items like the huge drop in retail sales in December, the breakup of Citigroup, the new bankruptcy filings by companies like Nortel and Gottschalks, etc., only reinforce my themes. A prolonged sideways market remains my baseline.
But, there were a few items of note:
1) The recession is global: England is implementing programs to stimulate bank lending to small businesses; Ireland may need assistance from the IMF; Greece’s and Portugal’s credit rating were lowered by S&P (Spain is being warned of similar downgrade); German GDP is contacting; Deutsche Bank blames “exceptional conditions” for a full-year loss.
2) Bernanke says the banking / credit crisis is not over and requires further stimulus. Also that the timing and strength of any economic recovery is uncertain.
3) While slowing dramatically, China is still showing positive growth and has overtaken Germany as the world’s #3 economy (behind the US and Japan).