Aside from a bloodbath in the the preceding days, not much has happened in the financial markets. Today, I was at Lisbon, having a lunch with an investment portfolio manager, where we discussed the present state of affairs in Europe. Our major conclusion was that the main event in the following days is an EU summit, where it is supposed to save the Euro. Honestly, we both laughed at the fact that in the past 2 years we have followed hundreds of EU summits destined to save the Euro. Our conclusion was that we won’t bother ourselves with analyzing any announcements. It just doesn’t matter.
Everyone is expecting that the politicians will save the economy, with some magical measures. I believe that it is more likely that the economy will save the politicians (they now seem to get ill only days after winning elections). Adam Smith’s invisible hand has a lot more chances to save us all than that any European politician.
So bottom line: My faith in Europe is not in its politicians, it is on the people, the enterprises, and the fact that no matter what Europe has always been able to move forward even after almost destroying itself.
On another note I cannot let pass the fact that the Housing Prices Index rose in April in the US, these can be great news if it keeps the trend in the following months.