Given the bank recapitalization plan announced over the weekend, the France national government may be on the hook to help recapitalize and backstop its banking system. The markets will be full of noise in the next few days and we will be watching the France-German 10-year bond yield very carefully.
This spread, we believe, will be the ultimate voting machine on the final Euro deal to be cut on Wednesday. It recently blew through 100 bps and nothing else matters, in our opinion. Equities feel like they want to run here and are probably not the best indicator of confidence in the Euro plan. Ultimately, this whole exercise is about restoring confidence. The France-German spread should let us know if it has.
It’s going to be an interesting week. Stay tuned.
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Global Macro Monitor 
Nicely summarised – very succinct. If we cant bridge that gap then Europe and the rest of us are in for some bad days ahead.
I’m banking on some sort of a plan to be delivered – well fingers crossed anyway.
Thanks, Greg. And thanks for all your support. Lighthouse seems to have a great business and market plan. Cheers.