I saw immediately that it was deja vu. Now everybody agrees with me. All the relief about the new EU deal is quickly evaporating — even more quickly than in July. All the leaders did was announce that they intended to have a deal. But almost all the details still needed to be worked out.
As soon as everybody figured this out, investors started demanding higher yields for Spanish and Italian bonds. The stock markets in Europe closed down. They began to see that the EU bailout fund won’t do enough. A 10% first loss fund isn’t sufficient when the Greek bonds had a 50% haircut. And how will the bond buying activities of the ECB continue when Germany says no?
Everybody now sees it’s business as usual in the European Union.