"For months in a row, the core propaganda meme seeking to drag lambs into the
ponzi, has been one of "ignore Europe - it is irrelevant." Naturally
this "narrative" was primarily spread by expendable C-grade media elements whose
careers will promptly terminate once this latest episode of artificial
"decoupling" is over, as we have been warning for months (at a cost to the S&P of
over 200 points). And judging by today's US Trade Balance, which came in at
a whopping $47.8 billion on expectations of $45 billion, the widest gap since
June, which was driven due a plunge in European exports as the European
economy is shriveling in the grips of what is about to be a doozy of a
recession, it may be time to polish those resumes as the inevitable
decoupling approaches with every passing hour. Yet one of the best comments on
what Europe really means for the world comes from none other than Bank of
America. While we have discussed previously that BAC is doing its best to crush
the market and to precipitate QE3, thus like everyone else, always having an
agenda in its message, what it is saying is spot on. And it is as follows:
"Europe matters, according to the most oft-heard arguments, because of its size
and the euro’s reserve currency status. The Euro area’s systemic relevance (both
in trade and financial terms) means that its governance crisis is a global
menace. This narrative portrays Europe as a self-contained shock emitter, with
the rest of the world cast as innocent bystander. Rather, much like the
Lehman bust, the current Euro area crisis may be a symptom of faulty globalized
finance. Europe is rightly being held to account for fiscal mismanagement, but
there may be bigger cracks in the background." Spot on, and it gets
even worse, which we urge everyone who still doesn't grasp the linkages between
Europe and the US to read on.
From Bank of America:
Hot topic: Europe will remain a global issue
The European crisis remains center-stage but markets are no longer the proverbial deer in the headlights. With hints of normalization in capital flows to emerging markets, investors have become more discriminating. The latest currency moves summarize the prevailing sentiment: greater appetite for LatAm returns and a pass on EMEA assets (Chart 2). This pattern conveys both caution with exposure to the Euro area and optimism on the back of the recent improvement in the US macro data; thus we highlight LatAm’s good fortune, being relatively safe from European ripples and influenced by a more dynamic US..."
at http://www.zerohedge.com/news/europe-lehman-symptom-faulty-globalized-finance-bank-america-thinks-so
From Bank of America:
Hot topic: Europe will remain a global issue
The European crisis remains center-stage but markets are no longer the proverbial deer in the headlights. With hints of normalization in capital flows to emerging markets, investors have become more discriminating. The latest currency moves summarize the prevailing sentiment: greater appetite for LatAm returns and a pass on EMEA assets (Chart 2). This pattern conveys both caution with exposure to the Euro area and optimism on the back of the recent improvement in the US macro data; thus we highlight LatAm’s good fortune, being relatively safe from European ripples and influenced by a more dynamic US..."
at http://www.zerohedge.com/news/europe-lehman-symptom-faulty-globalized-finance-bank-america-thinks-so
