The ECB's Fix Won't Be Good Enough

 | Dec 08, 2011 | 10:45 AM EST  | Comments
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Who is Mario Draghi trying to save with these half measures? He sure isn't going to help save the sovereigns. They are high and dry. He can be helping the banks, short term, but without help on the sovereign front, I just don't know how all of the banks can make it.

Maybe, just maybe, he is helping the European Central Bank and nothing more? Frankly, I don't see where that gets you. To me, he is fighting a raging fire with a bucket. The market seems to agree.

Last night on "Mad Money" in response to our "Tweet Like Mad" initiative, I succumbed to giving people a bank stock, U.S. Bancorp (USB), one of our core Action Alerts PLUS positions, mainly because it has nothing to do with Europe. I recommend here that a pair trade against a major international bank may be the way to go.

Other than the banks, I continue to see the hedge fund put playing out in remarkable fashion, remarkable given the sudden drop-off in the CurrencyShares Euro Trust (FXE). I would rather leg into still more Financial Select Sector SPDR (XLF) puts than embrace the long side for the moment, unless there is a price break of some significance, a la Costco (COST), which I think will reverse itself a few months from now when we begin to see the hefty profits from the new card membership rate increases and a gradual pass-through of the incredible hike in food prices.

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