As a New York Jets fan, I despair of all the talk about the New England Patriots. Yes they have an amazing combination in Coach Belichick and quarterback Brady; and yes they have incredibly talented tight ends and, in Wes Welker, one of the most dedicated players in football. But do I need to keep on hearing about it over and over again; and must I constantly worry about what the Patriots mean for the wellbeing of my Jets?
I desperately want to wish the Patriots away, but I cannot. They matter.
After all, the Jets are in the same division, we play them at least twice a year, and they often control our path to the playoffs.
When it comes to Europe, investors around the world also face this exasperating combination of having, but not wishing to pay close attention.
Every week, if not every day, Europe influences stocks, overwhelms sector-specific news, and frustrates careful security selection. The result is wave after wave of manic risk on and risk off days, together with spiking correlations and unsettling volatility.
A week ago, markets were hoping that the combination of an ECB policy meeting and yet another Summit of European leaders would allow them to leave behind -- not for a day or a week, but for months and quarters -- the unsettling European cloud. Unfortunately, neither was decisive enough; and yet another golden opportunity was insufficiently exploited by European policymakers.
Don't get me wrong, the two events did produce important results. Yet, given the scale and scope of the European crisis, they are not enough.
Put differently, what came out is necessary but not sufficient.
The ECB took bold steps to help banks facing crippling liquidity challenges. But it poured cold water on the notion that it was ready to go "all in" to stabilize the European sovereign debt problems.
At their Summit, leaders provided the foundation for a potentially stronger and less imperfect Eurozone. But they did not go far enough in combining the emphasis on fiscal discipline with growth and jobs, together with real institutional robustness. Meanwhile, they opened what could well prove to be quite a destabilizing Pandora's box.
British Prime Minister Cameron would have no part of the treaty changes proposed by his French and German counterparts. I suspect that this is a leading indicator of broader political strains that will get worse.
Additional tensions are likely to surface as leaders return to their domestic constituencies and, importantly, as the Summit's broad agreements get translated into specifics.
This is not only about stress between the 17 Eurozone countries and the 10 other members of the European Union (such as Britain) that are not members of the zone. It is also about frictions within each group.
European leaders still need to do a lot more, and quickly, if they are to catch up and get ahead of the crisis. Accordingly, and regrettably, the specter of volatility caused by European headlines will not recede for long. Investors need to continue to watch and worry about Europe... and I have no choice but to continue to watch and worry about the Patriots.
This post was originally published on CNBC. The views expressed are the author's own.
Yes.
I can tell you: nowhere... You believe Europe need UK more than the reverse? I can tell you that it's been a long time a lot of Europeans have wondered why there was not more integration without the UK. Now it's coming.
Budget contribution to the EU is about developping markets where commerce can happen. Sort of a Marshall plan....
To www.robbingamerica.com in their piece "Heroic Britain's 'NO'.....While Europe Moves Toward Dictatorship" Germany wants to control Europe through the ECB and Brussels. They are referring to a dictatorship of the Bureaucracy of Brussels and the lost of sovereignty of the nations of Europe that makes that necessary.
The UK never wanted to take part in the Euro, so this is nothing new. They always have been seeing themselves different. Political strains will always be a part of the EU because it consists of very independent countries. But as far as economic insight I give the leaders of the EU a higher mark than the leaders of the USA at the moment. If we have to wait for the Tea Party to understand how a consumer based economy works, I would say, don't hold your breath.
Hahaha, I especially like the phrase" frustrates careful security selection"! This was what pulled us all down into the abyss in the first place. Careful? You mean: a security selection that brings the most profit and who cares about the risks.
I get the feeling that there are a lot of risk-takers around the world looking at the way Europe tries to regulate more and more and also has a treaty now to get more uniformity in fiscal and budget policies in the different countries. That is something that the gamblers with our money do not like at all. More regulation and oversight; less possibilities to do with our money what they like.
http://viableopposition.blogspot.com/2011/12/european-debt-credit-default-swaps-next.html
It is these same instruments that bankrupted AIG during the Great Recession and, with the value of CDS being questioned after the Greek debt 50 percent haircut, the value of this form of "insurance" against default is dicey at best.
Apparently, banks are slow to learn from their past mistakes.
http://www.marketwatch.com/story/the-700-trillion-elephant-room-theres
Europe needs territorial expansion to grow.
With a warmer world, the European vacation window will be wider than the current summer two months with great benefits to the tourist industry. Siberia will become arable and with its fertile top soil, it will be the future bread basket of the world. It will attract emigrants who will not settle in Europe relieving it of its current burden of social services. These are but a couple of examples of the many benefits of a warmer climate.
The best solution for Europe is a warmer climate.
Capitalism remains the worst economic platform, except for everything else that's been tried in scale.
As a bond ghoul at the end of a 30 year bull run, forgive me if the credibility of your comments strains ones common sense. Today, the only way to make money in the bond market is to scare people into not lending so rates go up and then watch them come gapping down leaving those on the other side of the trade holding the bag. Squeezing them right when they need the loan the most. So watching rates double, triple and quadruple just before rollovers occur, mostly due to rumor and collusion, then return to perhaps a few bps from where they were, over and over again, seems to be the game the bond ghouls play now, even when treasuries are negative.
No amount of high brow PR hides what is going on. And the end game of course, is the US, unless they start cutting the spending and creating a budget surplus. That’s why today some Billionaires love Obama. In fact both Pimco and Buffet got to be so rich, exactly because they could control and take advantage of public perception. Today Europe is evidence. Tomorrow, the profligate US.
People in Britain signed up for a common market, not a federal union where our Parliament gets trumped by unelected Commissioners. As a result of the fact that the Greek government lied to us on seventeen separate occasions about the sheer scale of their debt, British people have overwhelmingly had enough of paying out for failed southern European economies. Since the days of the Common Agricultural Policy nations like Portugal, Italy, Spain and Italy have squandered untold sums through inefficient and corrupt government.
Under Blair we were refused a referendum. Why? Because British people have wanted out of the political elements of the treaty for a generation now. It is a completely self-appointing body of bureaucrats and we don't see why we should be paying nations that are wasting our money.
Cameron did the right thing - listened to the will of his own people.
Blair?....don't even get me started....
In effect the UK is barely more than an island of state-supported people, paid for by the taxes of a minority of bankers and financiers that sell financial services to the rest of Europe... not pretty. (of course I exagerate to pass the message but I think everyone understands).
Don;t forget that before finance really developped as a sector, the UK was calling for IMF help...
I'd only add that the UK has always treated Ireland as a "special case" - the economies are so closely linked that Ireland is really just an extension of the UK economy in everything but name. 16% of all of Ireland's exports go to Britain, a massive percentage.
Given Britain's (current) ownership of Northern Ireland it's in the North's interest to make sure the South doesn't go under.
But still...
It seems what is really needed is a Change in Attitude . .
that by consensus . . the Punch Bowl Needs to Be Taken Away . .
come to the Realization . . the Bill $$$$$
. . Finally!!! . . CanNot be passed on to the Dwindling number of Grandchildren . .
this diet of Snicker Bars & Red Bull have only Prolonged the Crisis . .