Thursday, December 9, 2010

Angry Europe is Back

Yesterday was relatively quiet, today the fireworks have started early-



If successful, where exactly that would leave Ireland, besides their own rhetoric insisting their government is financed through mid-2011, well who knows. If they truly do not pass this vote, I'm guessing a new deal would have to be worked out. The problem is that substantial damage will occur between now and then with Bond rates and CDS rates (the cost of borrowing and insuring those bonds) will go through the roof for the entirety of Europe. Germany is already seeing higher borrowing rates, which effectively means it will cost German CITIZENS more money to “help thy neighbor”.

Of course Merkel has already threatened to ditch the EU once, politically she may have no choice as Germans are not likely to take kindly to Ireland's obstinace, which will cost German tax payers more money both to help Ireland and to finance their own huge debt burden.

Italy has seen it's rates jump this morning. Portugal, Spain=no more lending facility.

The Euro has responded appropriately, which should put pressure on American markets.

Also in this morning's news, London Protests-


Euro Plunging-

1 min chart.






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