Europe: Shock and Awe - Part Deux

Today's news of the collaborative effort by the international banking community to support Europe in its woes had markets stair-stepping higher again.  As in Doc Barter's post, Against All Odds, much to the chagrin of some and shear amazement of others, the markets continue to find buyers at these levels.  As a trader, you are probably better off to not fight the tape.  Trade what you see, not what you feel.


The current life support efforts reminds me of the Shock and Awe treatment dished out by Europe to itself.  ONE TRILLON USD was the fix of that day.  That was May 2010.  So how far down the road did that effort kick the can?  16 months it would seem, only now circumstances have deteriorated further in some respects.


It also reminds me of the first words out of the US when the crisis of 2008 showed its first signs in late summer 2007.  Their statements emphasized that the problem(s) would be identified and rectified swiftly and decisively.  Then growth and prosperity can continue.  Several TRILLION USD later, and blown up balance sheets at all levels of government - absolutely nothing has changed.  Well, not completely true, the US banks should be better capitalized (by numerous bailouts of one description or another) and leverage is down.  But unemployment continues, economic activity stalling, and money printing efforts have not demonstrated their anticipated returns.


Today's markets are fascinating bellwethers even if they have adopted a more schizophrenic nature lately.  The VIX (Volatility Index - Weekly Chart shown) has butted up near 50, levels only last seen in late 2008 and early 2010.  A paradise for the trader with discipline and an edge.  Lock your bias in the other room, and trade.  


Will this time be different?  Will another multi-gazillion in paper currency intravenous injection truly make the difference necessary to extricate the region from its debt woes?  Does anyone really believe that another 16 month kick of the can is the right choice?  I don't.  Watching and Learning.