Enter Filletino

Austerity is such an unpopular policy that an Italian town (led by its "mayor") has decided to opt out. Rather than be forced to cut and combine agencies with its neighbors, Filletino has elected to print its own currency, the Fiorito. Worth its weight in Fritos and sporting the mayor's picture, the Fiorito is a feeble attempt at revolt. In the context of the crisis it is a harsh reminder that resolution remains a future event at best.

In other news about colored cotton fiber, the Renminbi marked a new high against the greenback. An official move of greater magnitude, say 6% even, could have a positive impact. The Euro rallied on the Greek bank news yesterday. The Italians placed some rollover debt today. The problems remain significant and, as we warned yesterday, Merkel is in the hot seat. The Euro is sitting back a penny today.

The debt problem is well documented. What you are going to get paid back in ( if at all) is heating up again.

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