This Guy Just Won’t Go Out Quietly
Just when you thought this little European debt crisis was behind us (I wish someone invented a sarcasm font), Trichet, who ends his 8 year reign as the head of the ECB in November has to make headlines like this to kill the little rally we had going:
“The crisis has reached a systemic dimension,” Trichet told lawmakers in Brussels today in his capacity as head of the European Systemic Risk Board. “Sovereign stress has moved from smaller economies to some of the larger countries. The crisis is systemic and must be tackled decisively.”
These headlines hit about 15 minutes after the European open when most indices were up small only to send most down 1% on the day….
I guess the main thing to take away from the last week is that while markets can turn on a dime, economies and crises cant. If we have learned anything from 2008/09 is that systemic problems can only be fixed with time. So while we could clearly have faced the worst of this summers’s debt crisis there is a strongly likelihood that sound coordinated policy initiatives and time, will be the only thing that truly fixes the problems. And for that reason alone I feel we have not likely seen the bottom.