That's the wonderful thing about the European situation. Every few days they "solve" the problem and we get the opportunity to short another rally. LOL. Looks like I'll get to buy back cheaper the FAZ shares I sold at the close yesterday and this morning.
The problem is too much sovereign debt, so the solution cannot be more sovereign debt. This is ridiculous. Dexia holds a bunch of Greek and other debt that is next to worthless, so now France and Belgium are going to guarantee it? Correct me if I'm wrong but when you guarantee something that is already recognized as worthless doesn't that mean you are just writing a check? So, basically France and Belgium are going to borrow money to pay Greece's debt. Hilarious. The Russell basically went straight up 6% on this? Is that some kind of bad joke?
First we transferred a bunch of bad mortgage debt from the banks to sovereigns, now the weaker sovereigns are defaulting, so we are transferring that bad debt from the banks to slightly stronger sovereigns whose debt is mostly owned by banks... I don't think you have to be real bright to see what is going to happen next.