Can't stand prosperity

The latest Investors Intelligence survey of market newsletter scribes is now showing a somewhat disturbing chasm between those who are bullish and those who are bearish, 60.2% v. 21.5%. This is the widest margin separating the bulls from the bears in over a year. Contrarily, a bearish indicator. Whose remaining to buy? The narrowness of the market in recent days coupled with some pretty frothy sentiment indicators has a look and a feel of yet another interim top, at a minimum. Furthermore, I would not be surprised that this is also about all she wrote for some time, given the growing evidence of both peaking earnings and a sowing real economy....Why is Alan Greenspan giving us a nearly daily update on the chances for a recession. Apparently, today he pronounced that odds are now 49.2% for a recession (kidding). He says the odds are 50/50. Really, how useful is this to anyone given his abysmal track record of forecasting and spotting bubbles? Although, I’ll give him credit for finding one in recent weeks, China. The prediction of “50/50” essentially guarantees that he will be correct with his recession forecast. That and his China call may be his first accurate calls in over two decades. Speaking of China, Bloomberg is reporting that the Agricultural Bank of China is “saddled with $100 billion of bad loans,” and, “may move some of its 14,500 rural branches to independent companies to speed up a government bailout and sell shares for the first time.” Agricultural Bank of China is China’s fourth-largest bank which serves the majority of China’s farmers. China’s government has spent billions of dollars over the past decade bailing out some of its largest institutions. But what is surprising about the ailing Agricultural Bank of China is the fact that some of their largest banking institutions apparently cannot even stand prosperity. According to Bloomberg, some 23 percent of its loans are currently in default. It’s becoming increasingly evident that quite literally, the world cannot afford a recession. News such as this might explain the apparent acts of desperation by the U.S. Federal Reserve in recent months. How severe might an economic retrenchment become if given the chance to gain traction? Maybe this notion explains why Ben Bernanke was motivated to slash the Fed funds rate so aggressively in September even as the Dow Industrials was resting a mere 3.8% from its all-time high. Perhaps the world is as fragile as their actions might indicate?