They say slow and steady wins all the time, and right now it's looking like it's true with respect to the economy and stock market. You can argue the recovery has been steady, and there's no doubt it's been slow, which makes the correlating move in stocks puzzling. It reminds me of the story of The Mouse That Roared. The hard part is figuring out who the mouse is in this case. In the story the tiny (three miles by five miles) fictitious European Duchy of Grand Fenwick declares war on America because an American winemaker is making a knock-off version of Grand Fenwick's biggest export - a pinot wine.
The idea was to go to war, lose the war, then see America come in and rebuild the country as it had recently done for Germany via the Marshall Plan (and since then in every corner of the world - even when we lose wars). Instead of losing through a stroke of luck, Duchy forces (one Field Marshall, three men-at-arms and twenty long bowmen) land in Manhattan during a city-wide disaster drill to find the place empty. They wander around until they stumble on a top secret lab that's working on the "Q Bomb," capable of destroying the world.
They're allowed to escape because their mail uniforms were thought to be the skin of Martian invaders.
America finally learns it's been at war for two months but now must bend to the will of the Duchy which has the bomb and its inventor. There are demands for greater smaller nations to have a voice in global affairs and for inspection of all of the world's nuclear weapons. Eventually, the creator of the bomb discovers it doesn't work - it's a dud. But, he doesn't tell anyone for fear of the world spiraling out of its peaceful state. The mouse that roared became the peacekeeper of the planet. There are lots of candidates for the mouse that roars and gets its way these days, including:
Environmentalists
Unions
Mobs in Emerging Growth Nations
US Economy
Ben Bernanke
It goes without saying Ben Bernanke is powerful but is he just hiding behind a "Q Bomb" or does he have the stuff that will bring an era of vigor and renewed optimism into the country? There are signs the economy is edging back but the glacial pace suggests a natural phenomenon that probably happens anyway - and probably fast, without all the money printing shenanigans. Certainly it's been something of an eye-opener to have the kind of Fed "accommodation" witnessed over the past few years with such negligible impact... and no inflation!
Then there's the economy, which used to soar like an eagle but is now as quiet as a mouse, yet this may be the earning season that makes enough noise to spark the next leg of the stock market rally. Sure, the numbers are like that if the Duchy of Grand Fenwick yet it's been so long the natives are impressed. The rationale is we're heading in the right direction, a fact echoed in the May JOLTS report.
For May 2013
Job Openings were at 3.83 million, up slightly from April's 3.80 but the quality of jobs is worrisome.
Quits: 2.07 million (2.9 million December 2007)
Layoffs: 1.74 million from 1.96 million a year earlier and 2.60 million (peak) January 2009
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