Hitting new highs, stocks have made some jaw dropping moves over the last ten days. Much of the action has been based on high profile statements by Mario Draghi, President of the European Central Bank. Draghi has been front and center claiming to be ready, willing, and able, he has said he will do anything necessary to save the euro. The question is if the political will exist to face the cost that may exceed two trillion dollars. As the Euro zones fourth fifth largest economy the Spanish government must borrow €385 billion until the end of 2014 to cover its budget deficit and other needs such as bond redemptions, according to economists at Credit Suisse.
This could be the reason "Super Mario" has beefed up his mission to support the troubled currency, it seems the wheels may be coming off the bus. At times it seems the only thing holding the euro together is dumb, blind hope. Greece is not getting any better, and more downgrades came out after markets closed at the weeks end, some economist now are predicting that Slovenia will be the next country to line up at the bailout window. Much of the recent market action of staging a rally on bad news with the hope that the federal reserve will throw more money at the problem is not a good sign, it is reminisce of 2007 just before the collapse.
If you have time, please take a peek at my July 23 post Spain To Big To Fail, so they said!