I can t help feeling reminded of what our veteran Japan expert Robert Feldman has dubbed the CRIC-cycle, which typically goes through four stages Crisis, Response, Improvement, Complacency before morphing into the next crisis. Japan has gone through several such cycles over the past two decades, and I worry that we have now arrived in the complacency stage of the euro area s first big one.

–Joachim Fels, Complacency Rules?, Morgan Stanley Economics, 4 March 2012, 3:31 am.

So much for Response and Improvement.

Dr. Fels is worried. So, too, is Charles Wyplosz. Do I have your attention?

Greece went repetitively record-wide last week. Portugal repeated contagion-on/contagion-off days. The unreal real economy of some-of-Europe implodes, bringing repeated forecasts of nominal (Nominal!) wage deflation.

In the battle-scarred turret that is Bloomberg Surveillance and Ken Prewitt’s Bloomberg The First Word, we are “Europed” out.

However, we are not complacent. You should not be, either.

Who is? Per Dr. Feldman’s CRIC theory, it is the politicians. This is a critical week but we have all said that repeatedly.

Repeat after me: Watch the markets more than usual this week. Stay attuned to your trusted sources. Ignore the Red Sox. And get set for…CRICR. Crisis, Response, Improvement, Complacency, Repeat. Discuss.

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