Question: How are Eurobonds like having your leg amputated?
Answer: It's the last thing you want, but it could save your life.
At least that's (sort of) how Jeff Kleintop, Chief Market Strategist at LPL Financial sees it. Kleintop, like the rest of us, knows full well that a European debt fix is needed before our own markets can meaningfully move forward.
"Markets want a policy response but not from the Fed," Kleintop says. "They'd like to see it from Europe where our real debt problems lie. That's what has been swinging our markets around... and the markets are demanding some kind of response."
With Jackson Hole and then Hurricane Irene overtaking our uninterrupted attention, it feels like a weird sort of reunion to suddenly be talking about the euro debt crisis again. And Kleintop says September could be a key month for European resolution.
Not only is the European Financial Stability Facility (EFSF) gaining traction, but so is support for Eurobonds. Even facti0ns within Germany, whom he describes as the Tea Party of Europe, are warming to the idea.
"You're talking about a $7 trillion government bond market that would be a highly rated alternative to U.S. Treasuries," Kleintop says. "The longer term solution is inevitably going to be the idea of Eurobonds."Read More »from Eurobonds Are the Inevitable Fix for Europe’s Debt Crisis: Kleintop