Like the rest of you we are up to our eyeballs today in work stuff, so will be brief.
Well they DID do something (see our translation in last night's post). We would like to think that once the real money laggards have done whatever they have to re their mindless benchmarks the discretionary mob can start buying equities again, but the early confident JBTFD has evolved into a "whoops to soon". This is still a deleveraging game because we are more and more sure that if you don't delever yourself then the authorities are going to do it for you.
Periphery bond intervention runs to the same jousting rules we described last week for FX. They are in and we are guessing as to how much they have done and how much ammo they have. The frightening thing this morning is the complete lack of solidarity they are showing amongst themselves with the Germans already complaining. The US downgrade is a sideshow compared to this. The early kick off to the London Olympics brick chucking competition appears totally irrelevant, but we would like to point to it as the first signs of the unrest we alluded to on friday, though we doubt the mob involved could even spell university let alone get into one. Free shopping appears to have been the main draw.
Right, back to work. TMM leave you with a letter they have seen from the ECB.
Dear Mrs Merkel,
Thank you for your very generous bid at last night's charity auction in support of poor Italians. We realise that your exuberant generosity may have been the result of the copious supply of Spanish wine provided, but though you are now suffering a God-awful hangover and in the cold light of day are regretting your actions, we are going to hold you to your bid and can assure you that the pain you feel now will be nothing compared to that you will feel tomorrow.
Yours kindly
The ECB.
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