Quiet Mondays Hide Nothing

The market feels brittle and fragile today after mixed news on Dubai World over the weekend. The actual loss itself should not be news and the complex negotiation process of the restructure cannot be surprising. Now we reach another chaotic point where sentiment on one hand and ability to "weather the storm" on the other matter more than sound business.

For example RBS was not going to stay in its current form for long, but puffing investors to buy up the pieces will require a credible story barely tenable when the tide was rising. Hitting it with losses and capital requirements when it is weak changes everything. There's a chance saving it or letting it go both would hurt Sovereign credit. Only the disappearing middle path where it survived without being a drain led to true safety.