The EU/ECB ‘rescue’ package is on its way to a melt down today.
First shot – The UK at today’s emergency meeting of finance ministers, has said it won’t be part of the proposed EU stability fund. That leaves a hole in the finances but a much bigger one in the political credibility.
Second shot – Merkel has lost her majority in Germany’s upper house. What does this mean? Well it means there is virtually no chance now of Germany agreeing to any more funding and bailing of anyone in the coming months. So much for stability and calm.
Third shot – The British parties are having ‘talks’ – like three drunks deciding how to share a fag end. No one is governing and none of those hoping to, has much idea what the hell to do.
Some short sellers are already preparing, at least talking among themselves, about shorting the pound.
This is now looking like a full on melt down – Last week the markets and particularly the credit markets, went Three Mile Island. This coming week its going to be Chernobyl. Chain reaction going critical, Poor containment, lousy leadership and rampant ignorance. Apart from that though it’s all going to be fine.
The bond market and speculators will be divided between apprehension and avarice.
I think the measures the Eu is going to announce will be seen as too puny. Laughable in fact. If they even give a small bounce I’ll be puzzled. I just can’t see the cost of insuring Spanish, Portuguese or Italian debt going down. If it doesn’t go down it will go up fairly fast. Cost of insuring bank debt will also climb.
US consumer spending will be down. That will occupy the US media spin merchants.
I think Japan is also going to get its cage rattled by the rating agencies again fairly soon.
But they did manage to scrape together a package of formidable proportions, sufficient for the time being, but will it be "enforcable" in the European capitals, I wonder.
Just seeing how the markets have rebounded on the news of the EU/ECB bailout – it just proves your point again Golem about 'volatility'. Leave things as they are – ie. rotting away nicely and the markets slide. Pump in/promise €500Bn of (presumably) tax payers money – and watch the markets magically recover.
Seems like the stock market is the best place to put my savings…