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Markets Riding on Bunch of European Bureaucrats

Deutsche Bank CEO Josef Ackerman, speaking in an interview on our air, said he was "confident we are getting closer to a comprehensive package" to address the European debt crisis.

Let's hope so: a lot is riding on a bunch of bureaucrats in Europe. The S&P 500 has busted through the top end of its two-month trading range; the CBOE Volatility Index (VIX) has dropped below 30 for the first time since exploding from 23 to 48 in the beginning of August.

Traders are expecting movement on four fronts:

1) clarity on leveraging the EFSF

2) a procedure for recapitalizing banks, either through the EFSF or through national governments

3) an increase in the "haircut" on Greek bonds

4) an increased role for the IMF, using money already at their disposal or with new commitments from its most influential members.

This is an awful lot to expect from a couple of meetings: the EU Summit on October 23rd, and the G20 meeting November 2nd. It's one thing to issue a communique supporting a common approach (this will undoubtedly happen); whether all the expectations above will be met is another entirely.

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