This is sooooo bad I might have to watch Michelle Obama tonight. Next night, no problem as the Giants open against the hated Dallas Cowboys which means that even William Jefferson Clinton is coming in second in the ratings but we really have to wait until Thursday to generate some interest out there as it is then that Draghi is scheduled to reveal all, unless...
It was all revealed today at what was supposed to be a hush, hush meeting between Draghi and assorted ministers and potentates at which he revealed that in his mind it was perfectly legal for the ECB to purchase a nation's debt provided the maturity in question was no greater than three years. It wasn't five minutes after the meeting ended that the news was all over the airwaves and shouts of 'Viva Mario" could be heard in the streets of Europe. Markets jumped at the news until another five minutes passed and the Euro equivalent of, "Say WHAT?" was being muttered. A great central banker, but a lawyer? Meanwhile, the boys and girls were all over the place. Angie was meeting with someone important, Frankie went to see the other Mario, German ministers were meeting with German ministers (they're good at that), and while all this was going on the Spanish were busy stuffing suitcases with Euros and hauling them out of the country. It didn't help that yesterday, the NY Times reported that American banks were making contingency plans on behalf of themselves and their clients for the eventuality of the Greeks abandoning the Euro. Frankly, I would say it would be criminal for them not to so do or in other words, what's the big deal?
The economic numbers all over the globe stink and unless they get better real soon, all the bond buying programs and monetary stimuli in the world may not have any effect. Further, the most important thing on the horizon is the outcome of the American election for unless a clear trend emerges I expect to see and even greater slow down in activity as we close in on the event. I don't think I have witnessed more fragility in the global marketplace than at this period of time. Of course that is but my opinion. If the best the Euros can hope for on Thursday is what was leaked today, I suspect the reaction will be moderately negative and possibly worse if the Bundesbank--which remained silent in the face of today's revelation--comes down hard in opposition. Where we go from there is anybody's guess but I still find it hard to conceive of any scenario where Greece is again viable as a member of the Union. Without further guidance, Thursday looms large. We shall wait.
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