Once again, Stock markets drool over central bank uppers as 'Central Banks are the only game in town'

Here we go again. Stock markets drool over the prospects of central bank 'uppers'.

 

Bloomberg reports on today’s stock market activities…

European and Asian stocks rose with U.S. equity-index futures and the yen weakened on signs policymakers in China and Japan will do more to support economic growth…

The People’s Bank of China is asking city lenders to apply for cash to support loans to smaller enterprises, according to an official with knowledge of the matter. Speculation is mounting in Japan that Abe will call a snap election to seek support for delaying a planned sales-tax increase.

Japan's Nikkei closed 1.14% today and is fast approaching the May 2007 highs as the yen got battered.

Are stocks pricing have been based on fundamentals or earnings? Well from the above, you can throw textbooks into the garbage bin.

“Central banks are the only game in town now” to paraphrase Bank of France Governor Christian Noyer. Of course that’s until the magical spell blows over

Oh by the way, see why the Chinese government have been propping up the stock market? There seems to be signfinant credit gridlock in the real economy as shown by the PBoC's urging of local lenders to "support loans to smaller enterprises".  

The underlying belief is that you can do away with debt problems by having more debt. Keeping stock markets up may just persuade lenders to lend to deadbeats.