There are some disturbing signs that interbank liquidity in European markets has essentially frozen up. The first print of the EUR-USD shows the Euro falling off a cliff. For those of you who are still in the markets, batten down the hatches. Something
big is going to have to be done; I look for The Bernank to step in forcefully at some point, quite possibly tomorrow. I expect the Fed's "swap lines" to be used extensively this week. Worse, Angela Merkel's CDU Party was crushed in a bye election this weekend by a German electorate fed up with her endless bailouts, and this will serve to limit her ability to act decisively this week. Look out.
I don't know where to hide Mr K. PMs seem my only refuge.
ReplyDeleteOne thing I'd be looking into is a 2x etf shorting the s&p and the euro. No comment about metals; if deflation hits in a meaningful way, bottom could fall out. Tough call--
ReplyDeleteSincerely Mr.K
Merkels election results are meaningless.
ReplyDeleteAll the other German parties are even more pro-Euro than her CDU. German voters have no alternatives.
The Bailout of EU banks is coming.
Not only that, the crisis will be used as cover to usurp control of the EU from the individual nations to a banker control bureaucracy.
Germans will be milked like cows, ostensibly to prop up the PIGS, in reality to rebuild the balance sheets of the elite owned banks.