Tuesday, February 26, 2013

European Jason

It is the undead.  Europe.  Just when you think it went away it comes back.  The same script has been used over and over, and the market still gets spooked.  It is like a cheap horror film where you know when the scary scene comes, but most of the audience gets scared anyway. This time, the Italian election is supposed to make us want to sell all risk assets and temporarily hide in a bunker until the all clear sign.

The Italians are not suicidal.  If they leave the Euro, it will be like suicide bombers running around in downtown Milan.  They will not leave.  Isn't this what we're all supposed to be scared of?  That somehow the wrong politician gets elected and they decide to screw austerity and those stipulations for free money and say FU to Merkel?  This panic will pass quickly.  I am more worried about other things, more fundamental to the market, like higher taxes and lower government spending, not Berlusconi as a Jason replacement in Friday the 13th. 

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