Thursday, October 27, 2011

Markets Defer to 'Financial Terrorists'

Global markets are melting up today upon the perception that the Eurozone has effectively solved its debt problem. Do not be misled, advises Max Kaiser, who in this rant [below] likens the Eurocrats responsible for this latest bailout to "financial terrorists." By proposing to leverage the European Financial Stability Fund, unelected ministers are, in Kaiser's words, "mollycoddling banks," undermining national sovereignty, and "guaranteeing economic collapse"--not bad for a long night's work. China, widely assumed to be a guarantor for the EFSF, is merely buying time, says Max, until it can hoard enough gold to immunize itself against the coming contagion.

You must see this:

Meanwhile, ZeroHedge tells us where to look for clues about the creditworthiness of the "ultimate backstoppers" -- Germany and China.

"Note to EU lackeys: there is no free lunch," writes Charles Hugh Smith, who likens the rescue plan to a plutonium life preserver. Heavy and toxic.

[update, 4 p.m.--]

Note to MainePERS: sell the Bazooka rally. BAC has just closed over 7.

[update, morning after--]

The euro-phoria has worn off. Italian ten-year bonds are back over 6%. The risk has not gone away.

Yield on Italian 10-year debt

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