Monday, September 05, 2011

While you were enjoying the 3 day weekend...

The European markets opened for the first time since the dismal US jobs report and proceeded to dip about 2% at the open.

However, that was just the beginning of the fun.

Belgium and Italy appear to be falling behind as their latest economic data suggests they are now hitting stall speed. Coupled with a major Germany banking CEO saying most European banks wouldn't be able to absorb the losses on sovereign debt if they were forced to recognize their actual market value, the markets couldn't catch their breath. The fact that this CEO's bank was all over the TV this weekend spending major dollars as a sponsor of a golf tournament was irony that wasn't lost on me.

The major European indexes finished down about 3-5% and there has been little reversal so far in Asia. With another solid down day or two, the US markets will have given up practically all of the Bernanke inspired QE3 gains.

I expect we'll hear a slew of comments early and often tomorrow about the size of QE3, other Fed policy options and Pres. Obama's stimulus plans and potential tax cuts.  As I've said repeatedly, businesses are not hiring because of a lack of demand not because of our current tax structure.  

Stay tuned for more info...

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