In a clear sense of Deja Vu, French banks are down again even with the denials of “all” market rumors and late day defense of Soc Gen by its CEO. A reuters story said an Asian bank “has cut credit lines to major French lenders” and other Asian banks are reviewing their counterparty risk. One thing to keep in mind with the French and its socialist bent, if this situation deteriorates further, we can be damn sure these banks will be nationalized in some way. There will be no tea party like rallies at the Eiffel Tower protesting against bailouts. The problem though with these European banks of course is that their issues reside predominantly with their sovereign bond holdings. The Swiss Franc is having its sharpest decline since Mar ’09 after an SNB official alluded to the possibility of pegging it to the euro. While more bearish than newsletter writers, individual investors became less so this past week, notwithstanding what has gone on. Bulls rose to 33.4 from 27.2 while Bears fell to 44.8 from 49.9. The Shanghai index was again a standout overseas with a 1.3% rally but Australia began to feel the economic softness as they reported a disappointing jobs figure.
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