With financing difficulties still brewing for other 'periphery' countries, we believe the ECB will be reluctantly compelled to backstop Europe's banking system, which holds substantial amounts of sovereign debt. We cannot see any other solution, but then, we have been waiting for Europe's policymakers to reach this conclusion for well over a year. We hope that the obvious failure of current policies to reduce deficits and the growing frustration of voters now makes ECB support more likely. As part of a workable solution, we believe major bank recapitalizations (as in the US) are needed, overseen by a unified banking authority/regulator. Furthermore, some form of a euro-wide deposit insurance scheme is likely needed to prevent bank runs, reinforcing the argument for a single bank regulator.

David Fuller's view I agree and there is much else of interest in this issue of The Weekly View.

Note in particular the NDR Crowd Sentiment Poll. It is oversold but not yet at the levels seen near the 2010 and 2011 lows. Consequently, without a catalyst to lift markets, and this is unlikely to come from the Fed just yet as the US stock market's decline has been moderate to date, there is a risk that we see some additional weakness before a significant rally occurs.

Subscriber's attending this year's 50th Annual Contrary Opinion Forum (highly recommended) will have an opportunity to hear and met Rod Smyth, in addition to Eoin Treacy, of course.