Euro Drops Below $1.36

The recent intraday low of 1.3586 was hit in the prior week. We will likely take that out shortly. Yet even this EURUSD level goes back only to May 2009 levels. There is much more room to go as the posturing in Europe continues, and no definitive bailout plan is announced. If Van Rompuy wanted to send a "clear political message" he sure succeeded... if that message was that cohesion and a united understanding are sorely lacking, or that Europe will now really lean on the euro. In the meantime, we can't wait to see just how excited the broader Greek population will be about the upcoming austerity measure.

Statement By Heads Of State Or Government Of The European Union - Ever More Confusion

All euro area members must conduct sound national policies in line with the agreed rules. They have a shared responsibility for the economic and financial stability in the area.

In this context, we fully support the efforts of the Greek government and their commitment to do whatever is necessary, including adopting additional measures to ensure that the ambitious targets set in the stability programme for 2010 and the following years are met. We call on the Greek government to implement all these measures in a rigorous and determined manner to effectively reduce the budgetary deficit by 4% in 2010.

Early Thoughts From Art Cashin

"Cocktail Napkin Charting – As noted above, Wednesday’s action may have clouded rather than clarified the technical picture. Even a seasoned technician like Walter Murphy titled his discussion this morning “A Coin Toss”.

Yesterday, the S&P circled the wagons within the support band of 1058/1053. The intra-day low was 1059. The snowstorm may have postponed the technical resolution. Now the Lunar New Year may blur trading as much of Asia goes on holiday. Nonetheless, a definitive move appears to be looming in the next few trading days. We hope to get some clue to direction before it actually happens.

For today, the napkins suggest that first support still is 1058/1063. Resistance looks like 1074/1078 and then 1083/1088" Art Cashin

Frontrunning: February 11

• Majority of Germans wants D-Mark back (Frankfurter Allgemeine h/t Paul)
• Fed in talks with money market funds to help drain $1 trillion (Bloomberg)
• Jobless claims in US decrease more than anticipated (Bloomberg)
• Jobless suffer with corporate cash climbing to $1.9 trillion (Bloomberg)
• PIGS in rescue lipstick are uglier than default (Bloomberg)
• Greece: how the bond vigilantes left it in ruins (BusinessWeek)
• Stuyvesant Town ownership hinges on payment of $90 million (Bloomberg)

Jim O'Neill Releases Latest China Pitch, Remains Permabullish, Praises Greenspan And Dismisses Europe Problems

Just in case you were mystified what "excess capacity" cheerleader #1 Jim O'Neill thinks of the world, be mystified no more. Spoiler alert: Jim uses the words "remarkable analytical mind" and "Alan Greenspan" in the same sentence. And with that out of the way, read on, and while you are at it, buy buy buy.

EU Announces Immediate And Highly Indeterminate "Action" To Be Taken On Greece, No Disclosure What It Is

The non-bailout bailout is here. Or is it? They really should have used Larry Summers. Van Rompuy says "determined and coordinated action if needed" will be provided. Uh, it is needed. But what is the deal? And what are the details? Greek 2s10s 40 bps steeper to +93 bps as 2 Year trades 56 bps lower to 4.97%.

On The Eve Of The Greek Bailout, Clusterfuck Reigns, Threatening Tentative Market Stabilization With Collapse

The only thing in this world worse than Hank Paulson showing up in Congress with his initial 3-page TARP proposal giving him unlimited control over the US printing press? 12 non-Hank Paulsons, all of whom speak different languages, all of whom are hell bent on bailing everyone and everything out (just not on their political or physical dime...or 10 eurocents as the case may be), and all of whom have no idea how to bail out others' (and soon their own) economy... oh, and none of whom have access to Hank's reserve currency printer. In short, more than 24 hours after announcing a "bailout" of Greece, nobody in Europe has any idea what they need to do to actually "bail" Greece out. On the verge of tomorrow's summit during which it is widely expected that EU's new president
Herman Van Rompuy will announce just what the details of [asset guarantee|debt purchase|IMF (aka US Taxpayer) to the rescue] plan will be, the utter cluelessness and confusion is unprecedented.