The real financial news today had nothing to do with Mr. Dimon at the Senate. It was again out of Europe. German mfg took a big drop per MarkIt, and Spain is nearly insolvent per Egan-Jones. So we had yet another sharp stock reversal to the downside and yet another lower high about the 150 day sma.
It continues to look as though Europe is going through the U.S. experience of 2008. Now it's nation-states, before it was the core financial structure of the sole superpower with immense global reach. Not sure which is harder to deal with! In any case, the other structural difference from the standpoint of this American observer is that what happened in 2008 occurred at the home of the most important central bank in the world. This European thing is different. The Fed in theory can loan them all they need. In this scenario in which Italy is up next and falls despite the various reassuring words out of Europe today on this topic, Treasury rates could drop to unimaginably low levels. As in Japan, the general stock averages would get hit hard. However, if no catastrophic "Lehman moment" occurs this time, there might be a lot of differentiation between stocks, as was the case in the major 2001-2 U.S. bear market.
In this scenario, volatility will go wild between deteriorating fundamentals and the certainty of intervention-- but when, oh when will they print, and how much and in what form? Summer 2011 set certain modern-day records for 1% up- or down-days. Could a rerun of some such volatility spikes be in the offing?
I am also paying no special attention to the Greek election. Whichever party wins will be happy to have the spoils of power and will do whatever they will do. It's impossible for an American to invest based on such unknowns and the high chance that even if Syriza wins, Tsipras will pull an Enda Kenny, who became P.M. of Ireland only to follow the bail-out course set by the previous guys.
Momentous, perilous times.
Sometimes cash is kingly.