I have found it interesting to review writings from the 1930’s, as I find remarkable and yet subtle similarities to the current situation. Then, as now, America seemed more intent than ever on staying out of Europe’s squabbles, excepting of course the State Departments number one issue: Repayment of $1.3 Billion of bonds by the Nazi’s.
Then Ambassador to Germany, William Dodd wrote in a letter to Roosevelt in 1935 – “So many men think absolute isolation a coming paradise” Anyone who buys into the US market moving higher without realizing the potential impact from a Euro event is sure to be caught out in the end.
The primary driver thus far in 2012 has been weak euro/strong dollar, coinciding with the monthly ‘kick the can’ Euro meeting. At this point signs are that nothing gets settled before the SuperBowl, so the question becomes when and what to bet: Long April Downside, Short Feb ATM?
In any case – the casino’s remain open so place your bets. Risk On! and trade like its the 30’s.