Still reeling that the ECB didn't do more. Reeling that they didn't understand that the sovereigns need help in return for the austerity they have to administer to their budgets.
Yes, these poorer countries like Italy and Spain have spent too much, have profligate welfare states and have let others pay for their errant ways, but if they are going to continue their belt tightening austerity ways they need to know there is a backstop. They need to know that there is a rescue or else it isn't worth it and they will just risk going under.
No wonder, after all the tremendous bond advances in Spain and Italy, they got killed today. Those who bought those bonds believed, reasonably, that the ECB would stand behind them.
Lost in all of this is that the governments in Europe had begged these banks to buy this debt not that long ago. That doesn't absolve these banks from the reckless borrowings they made against them. It doesn't absolve these banks from their moronic risk controls and their inability to take losses. Nor does it absolve the authorities from demanding capital raises earlier. Today's announcement that the banks have to raise 115 billion euros seems too little, and for some, too late.
Earlier this morning everything was going right. Copper was rallying off the idea that there might be some pro-growth initiatives out of Europe beyond the rate cut we got. Gold was rallying on the supposed knowledge that the ECB would print euros to backstop countries. The FXE was moving up in recognition that the euro would be saved.
Now everything is in reversal. Copper slowing. FXE going the wrong way. And gold showing that the ECB has taken a deflationary course, the opposite of what is needed for equity markets.