People used to talk about a Greenspan put. It was a put on stocks. Now there's a Bernanke put, but it's a put on bonds. More precisely, it's a put on US government bonds, not on all bonds. Greece doesn't have its own central bank, and there isn't much of a Trichet put on Greek government bonds.
(A "put" means you have the option to sell a stock at a predetermined "strike" price. It puts a floor on what the stock is worth to you. A "call" is the opposite: an option to buy a stock.)
The news is looking bad. Bad in the US, and worse in the Eurozone. If you had just one source for the news, right now, what would it be: the stock market or the bond market? The bond market is a very bad news source. You don't know how to read it. When the Eurozone news is bad, Greek bonds fall, and German bonds rise. Should we read the news from US bond prices in Greek or in German? It is easier to interpret stock prices. When the news is bad, they go down. When the news is good, they go up. And increased correlations recently mean all the stockmarket newspapers are telling us roughly the same thing.
Events cause the news. But the news can also cause events. Causality runs both ways. It's the same with the news we get from stock and bond prices. They reflect what's happening in the world, but also affect what happens in the world. When we are talking about causality in this second direction, it's the same for both bond and stock prices. High bond prices, and high stocks prices, cause good things to happen. But government bond prices are governments' cost of borrowing. What is the interest elasticity of government borrowing? The fact that that question will be an unfamiliar question to many economists is in part an answer. "Governments do what governments do; it's politics" is how most would react.
In recessions, the positive feedback multiplier from fear to having reason to fear is strong. That is just another way of talking about the two-way causation between new of events and events. What is needed is a thermostat. A thermostat imposes a negative feedback loop into the system. It turns up the heat when the room gets too cold, and turns down the heat when the room gets too hot. A thermostat is both a put and a call on the room temperature. But a thermostat only works properly when it has a reliable source of news on the temperature of the room. And when it has a reliable connection to the furnace.
On both those grounds, a central bank put and call on stock prices would be a better thermostat than a central bank put and call on government bond prices.
In economics, there's also a meta-thermostat. The mere belief that there's a good thermostat in the room will stop people doing daft things that cause the room to overheat or freeze.
Right now, the US seems to have a Bernanke put on US government bond prices. That's more than Greece has. But a Bernanke put on stock prices would be much better. Make that put a literal put, if need be. And tell us what room temperature you are aiming for, when you adjust the strike price.