In short, the American consumer s nightmare is far from over. Spin and frothy markets aside, the healing has only just begun.

And then the asphaltenes and this is the crucial thing the asphaltenes get whipped by the waves into a frothy emulsion, something like mayonnaise.

But if financial markets are already frothy now, consider how frothy they will be in 2015, when the Fed starts tightening, and in 2017 (if not later), when the Fed finishes tightening? Last time, interest rates were too low for too long (2001 2004), and the subsequent rate normalization was too slow, inflating huge bubbles in credit, housing, and equity markets.

MONTEVIDEO Central bankers continue to fret about frothy asset markets as well they should, given the financial crisis of 2008 2009. Having been burned once, they are now doubly shy.

Myopic authorities need to take less guidance from frothy financial markets and focus more on the structural repair of a post crisis world. This is a time for heroes, not cheerleaders.

The problem is that China has already done a lot to stimulate domestic demand, both through government spending and by directing its banks to lend. As a result, its stock market is frothy, and it is experiencing an alarming property boom.

And she repurposes them with frills and ribbons, and makes these frothy confections that she sells to women for their daughter's Sweet 16 or first Holy Communion those milestones in a life that people want to celebrate all along the economic spectrum.

In their defense, central banks make the unsubstantiated claim that things would have been much worse had they not pursued QE. But, with now frothy manipulated asset markets posing new risks of financial instability, the jury is out on that point as well.

The UK, Spain, and Ireland are experiencing similar developments, with housing bubbles deflating and excessive consumer debt undercutting retail sales, thus leading to recession. Even in Italy, France, Greece, Portugal, Iceland, and the Baltic states, frothy housing markets are starting to slacken.

Unlike the days of yore, when cutting the price of credit could boost borrowing, quantitative easing purportedly works by stimulating asset and credit markets. The wealth effects generated by frothy financial markets are then presumed to rejuvenate long dormant animal spirits and get consumers spending again, irrespective of lingering balance sheet strains.

Finally, by emphasizing a regulatory fix, and thereby keeping its benchmark policy rate well above the dreaded zero bound, the PBOC is actually better positioned than other central banks to maintain control over monetary policy and not become ensnared in the open ended provision of liquidity that is so addictive for frothy markets. And, unlike in the West, China s targeted equity specific actions minimize the risk of financial contagion caused by liquidity spillovers into other asset markets.