Things to watch for this week:
1. Continuing search for money at MF Global. I expect it to only get worse.
2. New Government in Spain. This will be a test because an already weak economy has elected a government pledged to austerity measures believing this will create jobs in the long run. The question is how much more short term economic retrenchment the Spanish people are willing to endure.
3. Continued cut back of the Wall Street firms willingness to trade credit and the increasing volatility in prices of taxable fixed income bonds.
4. US Stock market as more market participants are giving up the ghost and looking for safe havens over the near term. I would expect commodities to rise as a safe haven trade.
The news from Washington will disappoint the market all week. To paraphrase someone “nobody will ever go broke underestimating the US Congress”.