BigTrends

Did the euros panic?  I think they did and probably with the help (push?) from our Fed and Government.  Look, our recovery is on track (or, it was) and the continued waffling back n' forth between the countries has put fear into all markets.  Bailout, no bailout.  Small bailout, large bailout.  Once this gargantuan number was rolled out Sunday right before trading began in Asia the reaction was as expected.  Heck, they are getting ahead of the curve now rather than chasing.  If Portugal fails, covered.  Spain?  Got your back, Spaniards.  Markets?  Well, a 4% move up after one of the worst weeks in recent memories sends a message to the shorts:  Don't mess with reflation.

The key here is avoiding the D word...Deflation.  The continued worries over inflation by the Euros were misguided, and much like the defensive posture of our Fed in 2007/08 they needed a bold response:  nearly a trillion dollars in 'potential' aid.  Why wouldn't they put this out to 'shock' the markets and the world?  It's yet to be seen if this response is damaging long term, but there is precedent.  Certainly our markets are the model here.  To be continued.