Monday, March 7, 2016


That's what this one is shaping up to be.  The markets have convinced themselves that the U.S. recovery has taken hold and the fears of a recession are in the past.  Oil rocketed up of 5% today with the optimists firmly in control in believing that the production freeze spoken of last week will solve the problem despite not a peep from Iran as to their intentions and the well know history of "beggar thy neighbor" in  world of oil producing countries.  Finally, there seems to be a growing conviction that even if China doesn't come back on line, the good ol' U.S. of A's economic coattails are going to drag the rest of the world out of this economic funk.  Who am I to say no I ask you.

But things haven't started to move yet and on Thursday the ECB gets together along with the Wise Men of the Union Over There to decide what new steps are needed to get the ball rolling and depending what comes out of that a new reassessment may be called for.  Sr. Draghi has of course a couple of options provided his German overseers go along.  He could increase the size of monthly bond purchases in an enhanced Quantitative Easing operation or he can go negative--with interest rates I mean--or he can do both which would be a pretty bad signal to any and all concerned that things aren't going so well.  Then again, he can stand pat (not going to happen) or come up with another brilliant weapon to replace the bazooka that probably will not work either.

Looming over all of this is the growing refugee crisis which threatens to break more than one economy unless some central funding solution is agreed which is not going to be easy.  Throw in the reported growth in the U.K. for a "yes" vote on Brexit and continued concern over the banking sector, Sr. Draghi and his colleagues have a real week of work before them which creates a scenario that nothing happens on Thursday which would not be a good thing at all.   There were very few signals today; perhaps more tomorrow, but make no mistake...this is a BIG week.  Problem is we have to take off for the Right Coast again on Thursday but we'll try to make a few predictions before then.   Back tomorrow.

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