So Did The Move Work?
No. While the U.S. stock market reacted like a teenage boy after a date with a super model, the central banks' action did nothing to address the root cause of the global financial stress.

Specifically: (i) the move did nothing to address the collateral problem of loans secured by European sovereign debt that is being held at prices that far exceed what that debt would trade for in the open market; and (ii) the move did nothing to address the fiscal problems of the Euro zone's sickest countries - namely, Greece, Italy, Ireland, Spain and Portugal.

Using a medical analogy, what the global central banks did on 11.30.11 was to reduce the price of morphine therapy for a terminally ill cancer patient (in order to ease the pain) from $1,500 per dose to $500 per dose. As a result of the price reduction per dose, the patient took three times more morphine, temporarily feels better, but the additional morphine does nothing to address the root cause of the cancer and serves only as a "pain-relieving bridge" until a the root cause of the cancer can be cured. o Many of you will remember that same central banks did the same thing during the week of 9.15.08 after Lehman failed and the Dow Industrial Average increased 700+ points.

Very shortly thereafter, the Dow Industrial Average declined nearly 4,000 points.

So What's The Bottom Line?
The bottom line is that the world's central banks know more than we know…..and what they know has them recoiling in horror!

Last Wednesday's measures were the proverbial "foam on the runway" in anticipation of a potential plane crash.

Eoin Treacy's view Veteran subscribers will be familiar with our view that the Euro will survive this crisis. Signs are improving that governments and the ECB are getting closer to an agreement on how to manage this crisis in a more effective manner. Much depends on the results of this week's summit.

One way or the other Europe's banking sector needs to be recapitalised. Steve Czech highlights the fact that US$1.06 trillion of European bank debt needs to be refinanced in the first quarter of 2012. This highlights how essential substantive action is from the Eurozone.

We will continue to be guided by the markets:

Italian 10-year spreads over German 10-year bonds hit at least a near-term peak in late November and a sustained move above 500 basis points would be required to indicate a re-escalation of risk premia.

The German DAX Index found support in the region of 5000 in October and rallied back towards the mean where it encountered resistance. Last week's rally has taken it back to retest the 200-day MA and A sustained move above 6250 would further bolster the recovery hypothesis.

The Dow Jones Euro Stoxx Banks Index failed to sustain the break to new lows late last month and rallied impressively last week. However, it will need to sustain a move above 120 to break the progression of lower rally highs and suggest demand has returned to dominance beyond the short term.