Remember that quintessential but awkward schoolyard tradition of picking sides in order to fairly set up battle in your sport of choice? Kickball comes to mind for me, and I confess that as a large lad, I never had to endure the stress of being picked last. In the financial markets today it feels like we're still picking sides on the playground; only now we're battling over degrees of weakness in the economy and whether or not we're heading into another recession or are in one already.
It could be months before we settle argument conclusively, and even when we do, many market watchers concede that it really doesn't matter. If we go into another shallow recession or narrowly avoid one, both will feel about the same.
In the meantime, our markets are battered, confidence is shaken, European unity is unraveling, and we are once again turning our collective gaze to a ski town in western Wyoming and a bearded man who many feel is out of ammo to lead us through the quagmire. With expectations high, we're left to speculate about Federal Reserve Chairman Ben Bernanke and what he could say or do in Jackson H*** this Friday to give the global markets comfort and confidence?
I think he's going to say exactly what I think; that we're not headed for recession. We're going to have slow growth, but no recession. But don't expect to hear any specifics about a third round of easing or QE3. "He won't say anything about QE3, but will say the economy is a bit weaker than we anticipated, but we (the Fed) will be there to help.
Since reassuring words alone would likely not be enough to calm investors, it is clear that "Backstop Ben" will have to deliver something more to a waiting world. The trick will be sounding flush without looking panicky.
Is the Fed Chief's Jackson H*** speech being too hyped up, or can Bernanke calm the markets and restore confidence? Let us know your thoughts in the comment section below