Top European official claimed that they would unveil a rescue plan by October 23, the date of the scheduled summit meeting of European leaders. They claimed they would prevent what was happening to Greece from happening to Italy. It would be different from July when a plan was announced but it was short on details.
But investors are too smart to believe what they hear. They’ve heard too much already. Instead all they do is look at German Finance Minister Wolfgang Schauble. He expressed the slightest hesitation about the plan’s prospects. He said he didn’t’ know when it would come about for sure, but certainly not this weekend. The market tanked just like magic.
Alan Greenspan used to do the same thing. Apparently investors respect someone they think knows what he’s talking about.