Does the market know the truth? No.
Does it know the truth about our banks? No. Bank of America just recently took a charge that was massively in excess of their alleged reserves for the same event. Do you believe its over? Why would you - it hasn't been thus far.
This campaign of lies is now running out of gas. The market is calling "Bull!" on everything that is being emitted from the so-called "authorities", including in this case Junker.
There's no fix for lies other than truth. The problem with the truth is that the banks are insolvent. Yes, ours. Yes, theirs. They did not take down their leverage. They hid it. There, here, everywhere, and it was done with the full complicity and active involvement of governments. Specifically, swaps and derivatives were not forced onto an exchange where chained risk is eliminated and independent nightly margining by a third party who has to make good if they don't do their job is enforced.
This is why Greece isn't fixed and why there's such a tizzy over defaults and "restructuring." It is why the ECB is so*****ed about the possibility of a credit event, because they broke their own rules on collateral quality and are holding a bunch of this trash themselves. Yeah, they'll probably survive Greece if it blows.
Italy? Not a prayer in Hell and the market is telling you it's going to happen.
Our government, for its part, faked a "recovery" with more than 10% of GDP in borrowed and blown funds. We spent it on things like giving free illegal guns to Mexican gangs through Gunwalker (yes, that was in the porkulus bill) which unfortunately turned into a subtraction to GDP when the guns were subsequently used to kill people that actually were productive.
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