The rug is turning out to be not big enough to hold all the problems that Europe has been trying to sweep underneath it as not only are European officials possibly going to throw in the towel on the uninspiring voluntary debt rollover by agreeing to a more enhanced debt restructuring for Greece (ECB be damned), Italy continues to get sucked in to the market scrutiny of who has too much debt and not enough growth. Yields are spiking again for a 6th straight day in Italy with CDS rising to a record high and the IBEX lower also for a 6th day, down 7.5% over the time period. A German newspaper said the ECB thinks the EU/IMF should about double the bailout facility to 1.5T euros to deal with Italy. EU Finance Ministers are meeting today and are certainly not having the summer they are accustomed to. Chinese stocks shrugged off the highest CPI reading since June ’08 of 6.4% thinking it’s near a peak. In the US, for the next few weeks we can put away the economic data that has whipped our heads around and now focus on the economic outlook from the horse’s mouth, corporate America.
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