Trader Talk

EU Obstacle: Real-Time Decisions in the Digital Age

A remarkable morning of conflicting headlines that highlights the immense difficulty of making collective decisions in the digital age.

S&P futures dropped several points just after 9am ET on a headline from the German newspaper Die Welt, saying that the German government could not rule out postponing the EU summit this weekend.

The follow up headline from Reuters: "Senior EU sources say unaware of any plan to postpone Sunday's EU Leaders' summit."

Of course they are unaware. These are not contradictory headlines. That's because Die Welt is reporting ongoing discussions in the German government, including coalition and opposition parties. They are reporting what German politicians and bureaucrats are thinking about before they even consult officials in other countries.

We are reporting — in real time — the thinking of decision-makers before they even have time to consult with each other.

Wait, it gets even wilder. At roughly the same time, the Telegraph — a British newspaper — posted what they claim to be the entire Euro summit statement on its website, complete with holes where there is still uncertainty over what should be said.

It's full of the usual euro-speak, but on the issues that traders want to hear about — a bigger Greek haircut, bank recapitalization, and use of the EFSF— details are notably lacking. For example, the EFSF "will be used in an effective way to ensure financial stability."

Details? There's a hole here, saying only "to be discussed by the Eurogroup" — an indication there is still no agreement on how to use the money.

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