Five to midnight.....
I have posted much recently on the craziness of current German policy. However with each passing day the situation is deteriorating. Mr Wulf is the German President who has questioned the legality of Eurobonds and the action of the ECB to date to stabilise Italy and Spain.
Now this could be acceptable if he was also saying, "lets get this overwith, default, deal with the fall out and start again." Of course, this is not what he is saying, instead he is appealing to the German public railing against reality. This the the same position as Merkel and Sarkozy proposing a Tobin tax they know will be vetoed by the British.
It is a poor state of affairs. Worse still, I am now forced to agree with Gordon Brown on something. He has said it is of the highest urgency that the G20 is convened to ehlp the world work a way out of the current mess - and on this he is absolutley right (what he thinks the solution is, I am less sure I will agree with...).
Meanwhile, the US is waiting on Ben Bernanke to announce or not announce a third round of Quantitative Easing. The hedge funds have seen what comes next and have the biggest short positions on the S&P since 2008. The issue is there is no magic bullet and many of the solutions the market is pushing for, Eurobonds won't work and neither will a 3rd dose of Quantitative Easing.
Five to midnight, not long to go now. Hope you enjoyed the summer....
