Wednesday beginning on the weak side

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Could be a very tough three days coming.

Yesterday probably used up all the Paulson plan rally exuberance. Yesterday could have been the first leg of a classic buy the rumor/sell the news event.

The package has been sold by threats of ‘grave risks’. Now the risk is the package doesn’t do anything for those ‘grave risks’ which it won’t, particularly in Europe. And they know cutting rates in the US did little or nothing, reducing expectations of what a rate cut could do in Europe.

Crude back up over $102 right now. This tends to weaken the USD as it increases the US import bill, but for now the desire to exit the Euro could overwhelm that.