What a weekend it was for global bankers!
Policymakers from the International Monetary Fund, the World Bank, the U.S. Treasury, and the European Union were all running around Washington and Frankfurt, trying to put together plans to “solve” the global debt crisis.
But as you’d expect, their so-called “solutions” are all over the map. And just like all the ideas suggested in the past, none of them gets at the CORE of the problem — that sovereign governments are swamped with too much unpayable debt, and default is the only solution!
Meanwhile, the cost of protecting German and French debt against default is surging to record highs — a sure sign the crisis is spreading from peripheral countries like Portugal and Greece to the very core of the euro zone ...
U.S. Treasury Secretary Tim Geithner just warned of “cascading default, bank runs and catastrophic risk” ...
And the IMF just admitted that its OWN $384-billion emergency fund is too small to cope with the debt crisis, suggesting it too needs a bailout!
That’s right! The world’s financial fallback just said it doesn’t have the resources needed to do its job!
So why did the market rally today?Because investors are literally clinging to any hint of hope they can find out there ... and just the sheer idea that policymakers are trying to solve this issue is enough for a quick rebound day.
But here’s my take: This movie is kind of like the “Rocky” sequels! Each and every one is worse than the one before it!
In other words, buying into this rally is the LAST thing to do because it’s going to fail just like all the other hope-filled bounces before it!
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