Cloudy, With a Chance of Armageddon

The European debt crisis is rapidly coming to a head. As I write this, press reports indicate a deal is in the works to recapitalize Europe's banks to the tune of about 108 billion Euros. Negotiations continue on other issues such as a Greek debt restructuring but expectations for a comprehensive deal are running high. Whether Germany and Europe can cut the Gordian knot of European debt by their self imposed deadline of Wednesday will likely determine the course of the markets in the near term. As Jeremy Grantham recently said, this is no market for young men so if you are prone to motion sickness, I'd suggest a strong dose of Dramamine.