A Rumor a Minute, 5-Point Swings a Minute: This is the New Normal?

Stock markets around the world have new fuel for rally: rumors. There is a rumor every minute.

Yesterday: “China to buy Italian bonds.” Not true. But, market rallied for over 100 DOW points in 5 min.

Today: “French President and Greek PM are to “talk.”  But markets bolted higher.

Late today: Brazil to the rescue of European debt crisis.Not to mention – not true.

vare va!

Zero Hedge: European Rumormill Goes Full Retard

Update: Italy Hasn’t Asked for Any Help From China, Deputy Min Says… Yeah. Full Retard

Wondering why stocks are soaring and the EURUSD is above 1.37 again? Why, nothing short of the latest rumor, this time that Russia will bail out Europe. Bloomberg reports that Russia may use its international reserves to buy common euro-area bonds if European policy makers back joint debt issuance, Reuters reported, citing an interview with Finance Minister Alexei Kudrin… Sorry, we just report them. Time for the trader diary to get its latest update. The only problem we see with this strategy of rolling daily bailouts is that after China and Russia, who would be far smarter to participate in a stalking horse bid of European assets than to invest general unsecured pre-petition claims, there will be nobody left to “rescue” Europe: after all who else is out there? Zimbabwe? Japan? Argentina? Iceland? We doubt even the 80286’s will buy that…

Interesting times.