Hat tip Signor Panic, Count Draghi-ula, this week's prize winner for slickest grease applied to a rusting rumor mill. His tale of saving the euro "no matter what it takes" truly exposes the full suite of "resources" Europe in fact has available to solve its debt crisis, the likes of which Tina, Bernice and Windy have assured Americans will preclude any necessity of a U.S. bailout subsidy. In the search for treasure, the ECB's cheap talk today delivers but a McDonalds' Happy Meal toy. Enjoy it everyone, because once the meal's packaging is unwrapped, I guarantee what's inside will be infested with maggots.
So, bring it on Mario. We are all looking forward to Italy and France joining the euro funeral once today's debt short squeeze at the euro-zone's periphery fades and everyone and your momma wakes up to face reality that, bond income in 2012 currency will possess markedly diminished purchasing power in the immediate period following "whatever it takes to 'save' the euro."
The Count could even shock the world coordinating a euro debt write down (which in fact is the only action having any hope of saving the euro), or instead embark on some unprecedented hyperinflationary intervention stuffing the balance sheet of an already many times over insolvent ECB with but more wildly mis-priced garbage, and in so doing venture a double-digit depreciation of the euro's exchange rate value. Either way, criminal ratings agencies yet again will be shown hopelessly behind the curve. These cannot cut their European debt ratings fast and deep enough to keep up with "whatever it takes to save the euro" This much is virtually certain.
There isn't much time left for a rumor mill to buy. Not with relative strength (top panel) and momentum (bottom) showing the NYSE in a late-March like state. One big ominous difference now, though, is that "death cross" earlier this month sinking the NYSE Composite's 50-day moving average below its 200-day moving average.
Remaining to be seen is whether shrieks of panic from trapped fascists at the ECB and Fed might serve to keep major indexes within respective ranges established since early-June bottom, this for some weeks going into September, say. Noteworthy at the present moment, though, is elevated volume registering at several turning points this year. Today's suggests the market's turn back down probably is but some mere hours away (if not minutes).
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