Wall Street is "one sick puppy," but the world's major central banks are even sicker as they throw impossible mountains of money at intractable problems, according to David Stockman, director of the Office of Management and Budget in the Reagan White House.
The outspoken Stockman said a stock market correction appeared to have taken hold last week until the Federal Reserve deliberately stopped it with some hints about a possible extension of quantitative easing (QE).
The comment from St. Louis Fed president James Bullard (who Stockman dubbed "Dullard") promptly caused Wall Street to buy the dip, and stocks came roaring back.
"And it's no different anywhere else in the central bank besotted financial markets around the world. Everywhere state action, not business enterprise, is believed to be the source of wealth creation — at least the stock market's paper wealth version and even if for just a few more hours or days," Stockman asserted on his Contra Corner blog.
He noted the Japanese stock market recovered recently after Japan's central bank suggested the heavily indebted government there would buy more equities, and European bourses this week came roaring back on a report the European Central Bank might start buying corporate bonds.
"The thing is, however, the last injection is never enough in today's stimulus addicted casinos," Stockman wrote.