Just another quick post. Writing that 2800 word post earlier today was tough, and then I sat down to relax and decided to just read The Economist online.
I am not particularly bullish on anything save gold or yen at the moment, but reading their euro coverage was enough to make me want to run and hide. Basic takeaways: Splitting the eurozone would require more money than any of us can imagine, and would result in volatility and losses that would make Lehman look like a walk in the park. Insolvency is the flavor of the day since liquidity is not a problem in the immediate term. No one wants to do anything about it (least of all the Germans) and there is way less time than anyone that decides thinks.
They invited Geithner over to Poland to… what? Laugh at him for the US having a higher total debt level than Europe? At least Europe didn’t go as far as stating that the US is comparatively politically defunct, Europe still has that title… Everyone in Europe is tripping over themselves to provide new and increasingly fanciful ways of denouncing the other’s solution suggestion and provide more of their own, and this process had a tour-de-force (farce?) so far this weekend. If this represents the elite of policymakers, intent doesn’t matter: incompetence will strike Europe down, and this has became all too clear to me after reviewing the writings on the matter that The Economist has put out. Also: liquidity by the central banks was a lot more important this Thursday than growth forecast to hit zero in the eurozone! Add a little bit of after-party regrets from the thurs-fri rally, and we could see a pretty nasty turn of sentiment, especially if we get worse news down the pipeline during the week.
Short Monday club?