The evolving Euro crisis is expanding and deteriorating rapidly. In only one week since the $1 trillion EU proposed bailout, the following happened:

• Merkel’s party got creamed in the regional German elections last week. This is paralyzing Germany politically.

• UK’s Brown resigned and Cameron took over.

• France’s Sarkozy threatened to pull out of the Euro and banged his fist on the table, making Merkel blink and leading to their disastrous German elections.

• Now Germany bans short sales on Banks and CDS and sovereign bonds – revealing the panic out there in the EU.

• EU is in total chaos politically, they cannot solve this crisis with their many nations who must approve each major fiscal measure like bailouts. The ECB and EU are not capable of the quick unilateral action like the Fed is capable of – meaning they are always behind the curve on this rapidly EU escalating sovereign bond crisis, which is spreading now to EU banks and CDS, not only sovereign bonds, and spreading to the Euro.

• They say the Euro has never been tested severely like this since its inception in 1999/2000. The test is a huge FAIL. The Euro is falling in an out of control way.

• ECB’s Trichet had to relent and do the nuclear option to buy bad paper (bonds etc) off the Greeks for starters. ECB loses huge credibility.

• Net effect of the political and financial failures is huge uncertainty for the Euro and the EU.

• This all leads to a Lehman like contagion, which is now in process. It’s all out of control.

• EU and ECB are only reacting to this mess and are they not in control at all.

• Contagion is spreading to all financial markets, and appears unstoppable.

• Electronic trading and ETFs cause liquidity to dry up in minutes to zero (means crashes are not controllable whatsoever).

• EU countermeasures are too late and are panicky – (they have lost control of the Euro and debt situation). Derivatives (like ETFs) have made markets highly susceptible to huge flash crashes. Attempts to counteract this only makes things worse. Markets are now totally out of control as circuit breaker measures in one market are merely circumvented by others moving to alternative markets/exchanges where they can still trade.

This list goes on but you get the idea.