The brief feeling of "Hooray We're Saved" lasted from approximately 1:00AM to 2:00AM depending of course on your time zone. Regardless of time zone, the rally was 1 hour long.
No Confidence in Trichet, Noyer
The exit poll by market participants, shown in the above chart, is a vote of no confidence for ECB President Jean-Claude Trichet who forced German Chancellor Angela Merkel to abandon her plans to make bondholders participate in the pain.
And certainly no one in their right mind believes ECB policymaker Christian Noyer and Governor of the Bank of France, who said "As far as I'm concerned, I exclude that there will be haircuts in the future." See ECB Noyer plays down chance of haircuts on euro debt
How Will The Fed Respond?
One hour is not a season, nor is a day, so we really do not know precisely what lies ahead, or what cockamamie plan the Fed will come up with in response to trash the dollar.
However, that vote of no confidence has to strike fear into those who want to save the euro as well as those on this side of the Atlantic who want to trash the dollar.
Make a New Plan, Stan
I am not a lawyer, but I suggest it is not up to either the EU or Prime Minister Brian Cowen to casually violate Irish law and the laws of the EU. Given the Terms of Enslavement violate both EU and Irish law, the agreement is arguably unconstitutional.
If I am correct, all it takes is for the next Irish Parliament to abide by the will of the people and say "It's time to make a new plan, Stan. The old plan was unconstitutional."
As an alternative, I suggest "Drop off the key Lee and get yourself free." After all, there must be "50 ways to leave the Euro" and threats of doing so would soon get Ireland a much better deal than the preposterous terms Prime Minister Brian Cowen and Finance Minister Brian Lenihan agreed to.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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