Europe is unraveling

fast and overnight it seems. This could get really ugly if bank runs start. Banks do not have to reserve their holdings of sovereign debt. One of the globalizing regulations put in by the Davos crowd over the last two decades. Akin to mandating that all AAA-rated collateralized mortgage debt be considered top-tier capital – which caused the 2008 crisis to be a global one. Do these clowns force Mr Magoo to write all their regulations or is Mr Magoo just the brightest mind in the room when they write them?

The euro dropped and dollar rose by 0.7% in a whoosh after Christine LaGarde new head of the IMF didn’t rule out anything re Greece and said “the IMF is not a cash machine”. Equity markets will drop the same %. Most commodities will drop more. Short-selling will likely be banned again soon – not that that is a wise thing to do. Get liquid – not leveraged.

I do think I know why the market rose in the tail end of June. That’s when the Fed and central banks started pumping more liquidity into the system. Gave their buddies and pals a two-week heads up to clear out positions before the SHTF and before they have to head off to the Hamptons and St Tropez for August.

One advantage of being a minnow. It doesn’t take as long to clear out positions

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