I wanted to address a few headlines that are pressuring markets today. The first one was that Merkel’s CDU party voted to give countries in the euro the option to leave if they choose. This is more formality than anything because a country can leave only on a voluntary basis and can’t be pushed out by others. The 2nd headline was from German FM that said the ESM will not happen in 2012. It was originally scheduled to begin operation in 2013 but a few weeks ago European officials had hoped to bring it forward to 2012. I say, they can’t even agree on the EFSF let along add another mechanism to their bailout arsenal. The 3rd headline was Moody’s putting Credit Suisse on review for a downgrade following their earnings release a few weeks ago. Irrespective of these headlines, the market is behaving as it should based on the poor action in European bond markets today, particularly from Spain.
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