Avoid Seduction By The News

CNBC is all aflutter about a report from Reuters concerning the US and its shadow banking facility, the IMF. We're told that the markets love this news.

Dec. 1 (Reuters) -- The United States would be ready to support the extension of the European Financial Stability Facility via an extra commitment of money from the International Monetary Fund, a U.S. official told Reuters on Wednesday.

Rather than getting bullish on this news, question it for a moment. Why would Europe need outside help? What does the IMF's presence symbolize? Why should the US get involved?

A more rational take on this news should bring out sellers, as its implications suggest things are worse throughout the EU than previously thought. But obviously we are far, far from the end of this bear market supercycle when Pavlovian bondholders salivate at the thought of unlimited purchases by the ECB that will paper over any and all distress.

Spain must be worse off than we know. Portugal, Italy, and Belgium too. France may be right behind them. How long can Germany shoulder the rest of Europe? Nationalism and psychology are slowly coming into play. Two ephemeral things over which the statists have no lasting control. Keynesianism pulls levers on a machine while overlooking the fact that it's a living, breathing organism -- hundreds of millions of minds.

The EU is in grave danger. The IMF symbolizes not just a monetary rescue, but a globalist one as well. If you have any doubt about the future success of common markets and political/monetary unions, have no fear -- the IMF is here. The EU debt crisis will be presented as a global problem that requires a global solution, and it will be shown as proof that the globalists' model works. Whether anyone believes this and for how long is another matter.

Why should the US get involved? Maybe it also has a role to play in the globalists' agenda. Maybe it wants to be seen as a team player. Maybe there is a chance to extort concessions. Maybe it just wants to ensure someone can buy our exports.

All I know is that the S&P has finally gotten to my upper target zone. I'm adding to my shorts against SPY 119 calls.