As ridiculous as it might seem, the Italian stock market was up low-single digits going into this week. France had rallied to the middle-single digits and Germany was--and still is--up double digits. Weirdest of all, Spain--which is verging on a depression--was down only mid-single digits.
Frankly, that's insane. With the exception of Germany, Europe's doing terribly. But if you had to ask me if the European policymakers were to gauge their priorities it would be:
1. Promoting austerity to the countries that want money and help.I wish I were joking. You scrap the carbon tax discussion and its verisimilitudes and you focus on growth to show you mean business, then the policy makers might actually have something to show for themselves now that things have gotten sticky for Spain again.
2. Fighting pollution and global warming, hence the incredibly surreal discussion of the need for a carbon tax.
3. Encouraging higher taxes on the ne'erdowell countries.
4. Stopping inflation before it takes hold.
5. Promoting growth.
Don't forget that without the massive firewall the shorts are forever going to be banging down these bonds and just paying the 5 percent vig for the right to destroy the Spanish treasury.
But right now we are going to have to endure the headlines, accept the risk that traders will force the linkage on us--even as when we read Jamie Dimon's letter we know that Europe's not the flashpoint it was, and pick as they knock down the major techs right along with the regional banks and perhaps retail, regardless of whether it makes any sense at all.
Which, by the way, it doesn't!