The European banking crisis was never "fixed" - the can was simply kicked down the road repeatedly. During our extended weekend in the US, more nervousness surrounding the European banks has surfaced and could very well drag US equities lower this week.
We read this over the weekend:
We read this over the weekend:
The head of the International Monetary Fund Christine Lagarde insisted that European banks needed extra capital, in a magazine interview on Monday.
"We believe that overall it is necessary to recapitalise European banks so that they are strong enough to withstand the risks linked to the debt crisis and weak growth," Lagarde told the weekly magazine Der Spiegel.
Recapitalisation was needed "to avert contagion" of the problems, she said.
German banking shares fell heavily in initial trading on Monday.
Shares in Deutsche Bank were showing a fall of 5.34 percent to 24.63 euros and Commerzbank shares fell by 4.37 percent to 1.84 euros on renewed concern about the eurozone debt crisis owing to new strains over the Greek programme to reform public finances.
This was just one of several stories written about the European banking sector of this past weekend.
Another article regarding the Italian markets specifically was in Reuters...Italian President Giorgio Napolitano urged swift action to strengthen planned austerity measures on Monday, saying a severe market selloff was a clear warning that markets had lost confidence in Italy.
"No one can underestimate the alarming signal from today's surge in the differential between the prices of Italian public debt instruments and those of Germany," Napolitano said in a statement.
"It is a sign of the persistent difficulty in regaining trust as is urgently and indispensably required," he said, adding that he urged all parties not to block measures needed to restore credibility.
Expect some fireworks this week.
Trade Date: 9/2/11
E-Mini S&P Trades*
(before fees and commissions):
E-Mini S&P Trades*
(before fees and commissions):
1. Pivot buy @ 1:15pm at 1173.00 = -0.50 & +0.50 (2 lots)
2. Algorithm positions (2)
3. "Reading the Tape" positions (2) ...combined Secret's, Algo, & "Reading the Tape" total...-2.50
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