Even as the melt up continues with the US economy double dipping, things in Europe are just getting plain worse by the day. First it was the disappointing series of PMI data out of the old continents, with a focus on the periphery, where pretty much every number missed expectations. Now Reuters is reporting that due to refinancing requirements to the tune of €25 billion by its two most insolvent banks Anglo Irish and Allied Irish, the banks, and the government of Ireland itself, has quietly request an extension of the European Commission bank guarantee program which bailed out the country back in 2008, and which is needed to bail it out all over again. "Ireland's guarantee, which is set to run out at the end of the year, saved its financial system from collapse when it was first issued in September 2008 and has continued to be a lifeline for lenders since the Greek crisis shut off their supply of term funding. Both Anglo Irish and Allied Irish Banks, the country's second-largest lender, have called for the guarantee to be extended and the government said it was in discussions with Brussels about its future." In other words, nothing continues to work in the European banking world, except that which is explicitly backed by the ECB, which in turn is implicitly backstopped by the Fed. If there was a reason for the melt up to surge another 3-4%, this is it.