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Euro Crisis "declared" over

Today OECD economist announced that "Euro dip welcome, no eurozone recession".

To some extent, this makes an admission that turmoil in Eurozone may indeed be good for Eurozone as it has brought about a serious drop in Euro which may end up benefiting European exports/businesses. Indeed, it seems that instead of intervention in open market to prop up the Euro  (as rumored to be the case last week with significant rise in Euro in short span of times) now Eurozone members seem to welcome a drop in Euro. Anecdotal evidence of this is that while last week's Euro drop to 1.23 was met with panic (and the rumored open market purchase) today Euro has dropped to 1.22 against US Dollar and no one seems to mind. It seems, essentially, that European leaders have decided that what they have done is enough and that if Euro remains under attack, it may be good for them anyway.

In addition Eurozone has started on a path of quantitative easing similar to U.S. by intervening in the bond market and have come up with a new-found confidence to let them declare that "no Eurozone county will default". Geithner is on the way to Europe and lessons of U.S. methods may indeed be finally be finding some support amongst EU members.

Coincidental to all this, in a seemingly twisted way, Euro decline seems to have taken pressure off China overheating and Yuan re-valuation. Indeed, Euro crises may have created seemingly a more stabilizing force rather than destabilzation.

This does not mean that problem is over. But indeed the fear and panic from last week has dissipated. This may only be until we hear of a "new" scare because economic fundamentals remain questionable, job market continue to remain weak, housing recovery is fragile. Liquidity-driven economy and cost-cutting based profits can push the market higher until the debts of the nations are called into question again. 

While I do not expect the market to reach it's pre-Greece heights in near term, as a defensive move, I am no longer short on the market and back into mostly cash. I will wait again for any major news that may shift the sentiment again to the negative side or will look into getting long into more defensive positions. 

Disclosure: Long TBT and USO.