OK, cool to ignore the euro, I get that. I can see that 7% Italian bonds, something that sent us down 400 points before, now have been accepted as a level that's not a real killer.
But how many things can we ignore at one time? Do we decide that Hungarian bonds at 9% don't matter? Is that Peru or something? Do we decide that the Spanish bank capital raise is really going to be easier than the UniCredit capital raise? Do we suck it up and avert our eyes at the coming hundreds of billions of dollars in European bond auctions?
Do we ignore that the Europeans still are winging it with no TALF and no TARP? In Merkel and the ECB we trust?
Last night I postulated a world where as long as we are stronger -- not strong but stronger -- we will not be rocked by the current goings on in Europe. We believe the pledge that the authorities won't let the big banks fail. We know that they seem to have some weird "I'm OK, you're OK, let's keep buying sovereign bonds" thing going. We are gratified that if a bank does need to raise money, it can do so even at terms that Shylock or Tony Soprano would say, "Heck, wouldn't you rather have your kneecaps broken?"
I know that my friend Doug Kass, who, along with his excellent surprises for 2012, also declared our independence from the sovereign states of lunacy yesterday.
My take is that if the situation there stabilizes -- big if -- if the big boys who lean on the S&P 500 futures when the euro breaks down have vanished -- big if -- if the morons who played bipolar risk-on/risk-off have left the building -- big if -- we are free to trade on our own data.
Until then, three days is a real good interlude. But it is not a successful test of execution risk in Europe -- in other words, so far whatever the Europeans have put in has made it so that we can focus on employment and growth here.
I just don't want to ignore new unknowns; I am fine ignoring the current ones.