EMU Stressing Out ~ The Risk Averse Alert

Monday, December 06, 2010

EMU Stressing Out

Evidently, the Eurozone is the stage on which the next act of El Swindle Grande is to be played. Germany appears the target, and so is loudly threatening to abandon the Euro ... this probably on account of its ├╝ber sensitivity toward those sordid, undesirable fruits of hyperinflation.

As I write this howls from Europe screaming, "profligacy!" can be heard in response to the President's proposal to extend Bush tax cuts. One can imagine risks of shifts in hot money flows in response to this practical widening of the divide between the haves and the have nots. The dollar's status as reserve currency plainly appears a growing point of contention.

Considering the financial system's recent, relatively sudden need for added central bank liquidity, as well as its further liquidity need for as far as the eye can see, rising interest rates resulting from an overwhelmed arrangement (wherein confidence is spiraling lower) could set off a mad scramble for capital, among other foreboding things...


If we take a cue from April top, then what has developed since November top puts the market immediately at risk of a rather hard fall over days and weeks ahead. When we consider those many technical measures revealing increasing weakness at November top relative to April top, this risk, indeed, can be objectively supposed elevated...

Fast Money
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