Momentous Decisions

A decision of global import,
Of the market-determining sort,
May sometimes be posed
For the judgment of those
Who make up a council or court.

Though everyone knows how it has to be,
Since there's only one way to vote ration'ly,
The markets are all
Completely enthralled
By the spellbinding risk of catastrophe.

Today, the financial world is enthralled by two such momentous decisions: 

• In Germany, the Federal Constitutional Court in Karlsruhe must determine whether the European Stability Mechanism may proceed; i.e., whether Germany may participate in it. Everyone expects a resounding "Ja" from the court, as a euro-collapse may well be the consequence of a "Nein" decision. At the same time, the court's upholding the ESM does not mean business as usual, as it would set in motion a process that may well end in a loss of German sovereignty to some form of European political union. 
• Meanwhile, here at home, the Fed Open Market Committee is expected to end its September meeting with an announcement of QE3, the third round of quantitative easing. Intended as a new round of economic stimulus, QE3 is already having an effect on the market before it's enacted, but it is not clear that a new round of Fed bond-buying will move the dial on the unemployment rate. 

Regardless, it appears that New York, London and Tokyo have already decided what Washington and Karlsruhe will do. Shares are up and the dollar is down in anticipation.