Stocks Are Boring; Alcoa Shows Why; Europe Punts

On a midsummer's day upon which the biggest news was awaiting the second quarter earnings report from ALCOA, after he closing bell, stocks simply drifted below the break-even line in a tight range throughout the session.

With earnings season at hand, one would normally expect more excitement, but, alas, all is not well with what used to be known as the perfect discounting mechanism, i.e., the Wall Street stock exchanges.

Like it or not, continued central bank intervention on the grandest of scales ever witnessed has done nothing to revitalize global industry. The world has been in a funk for at least the past four years - since the epochal events of fall, 2008 - banks are all insolvent zombies and a global slowdown is coming at a time when monetary authorities are at their weakest, with zero to near-zero base interest rates the norm, bloated central bank balance sheets, full of faulty debt instruments nobody else wants to own, and sovereign debt exploding everywhere.

The world is full of debt and overcapacity, yet those in charge, scared to death as they may be, relent whenever an adult solution - like actually writing down bad debts - is needed and instead pass the hat to neighboring countries, the next central banker or the IMF, which, incidentally, is funded by the same over-indebted nations that borrow from it.

In the corporate sector, the slowdown can be seen everywhere, but especially tantalizing was Alcoa's (AA) second quarter, in which the company posted a loss.

Of all the goofy headlines designed to make people think everything is OK, the only one to get it right was the AP, which blared, Alcoa Inc. posts 2Q net loss in slowing economy.

Aluminum manufacturer Alcoa Inc. says it lost $2 million in the second-quarter as revenue dropped due to weaker prices and pockets of declining demand in the slowing global economy.

Alcoa on Monday posted break-even earnings per share for the April-through-June quarter. That compares with net income of $322 million, or 28 cents a share, a year ago.

Revenue fell 9 percent to $5.96 billion.

The world's largest producer of aluminum has been squeezed into a condition in which it can no longer shed employees to save money, command a profitable price for its products due largely to over-supply, and thus, limps into the second half of the year off a loss with prospects for growth jaded, at best.

If Alcoa is any kind of bellwether, and, as a standing member of the Dow 30, it should be, the prospects for a robust earnings season have just been significantly reduced, maybe obliterated.

Companies can only do so much in stagnant or imploding economies, which is what the global condition is today, and just breaking even (or, taking a small loss) is probably considerably better than some of the companies to follow will do.

It's a very tough environment - one in which large firms have limited pricing power and smaller firms can't find financing. That's oversimplifying matters to a large degree, but there will be fire sales, clear misses and break evens on lowered expectations this quarter and going forward, unless and until central banks take their foot off the accelerator of the money-printing press.

Early signs of total collapse came from Europe today, where the ESM (European Stability Mechanism) - a permanent funding source of 500 billion Euros - was to be established, but was delayed amid growing discontent among participants, and the nagging need for the fund to not only bail out nations, but also the banks of those nations, without any preconditions.

The delay, just 10 days after a euphoric european summit ended with apparent agreement, sent Spanish bonds soaring over seven percent and confusion reigning supreme in the Eurozone.

This clip from CNBC, featuring two of the most vocal critics of centralized economic planning, central bank intervention and bailouts, Rick Santelli and Nigel Farage tells the story of the growing discontent perfectly well.

Dow 12,736.29, -36.18 (0.28%) NASDAQ 2,931.77, -5.56 (0.19%) S&P 500 1,352.46, -2.22 (0.16%) NYSE Composite 7,736.22, -20.40 (0.26%) NASDAQ Volume 1,358,825,380 NYSE Volume 2,810,960,750 Combined NYSE & NASDAQ Advance - Decline: 2427-3155 Combined NYSE & NASDAQ New highs - New lows: 293-51 WTI crude oil: 85.99, +1.54 Gold: 1,589.10, +10.20 Silver: 27.44, +0.52