It can't be good for your self-esteem to know that all of Europe is rejoicing because you've left your job. Regardless of how thick-skinned Oskar Lafontaine might be, he must have felt hard done by when he saw the faint praise with which he was damned following his shock resignation last week.

And it was a shock - one of the really big surprises that markets have had lately. It was a much bigger shock than the subsequent, and unrelated, resignation of the EU Commission. At least that had been touted as a possibility for some time. Nobody was expecting Oskar to hand in his cards.

When the announcement flashed up on the screens, people had to blink to be sure that they were reading it right. The market was paralysed for about 30 seconds and then the futures market took off as traders decided that this had to be good news for Europe.

Whether Lafontaine's departure is unambiguously good news remains to be seen, but it is good news for anyone who thought his idea of creating target zones for the major exchange rates was completely off the wall (which was most people). It's also good news for German companies who were railing against his tax proposals. And it was good news for the euro, which rallied immediately after the announcement and traded happily higher until the EU Commission resigned en masse.

The faint praise was faintest from ECB President Wim Duisenberg, who has had several clashes with Red Oskar over the last few months. When he was asked was he pleased about Mr Lafontaine's resignation, Wim said, rather chillingly I thought, that he had "no feelings" about it - although he showed a little more warmth regarding his successor whom, he said, he knew well. Actually, he said: "I know him very well and I congratulate Germany" which was as unambiguous as Wim would probably ever get!

Paradoxically, most people feel the ECB is more likely to cut rates now that Mr Lafontaine, that champion of rate cuts, is out of the way. It is ridiculous that conventional wisdom says that the ECB hasn't cut rates because Mr Lafontaine kept demanding that it should cut rates.

Mr Duisenberg would say that he couldn't be seen to be bowing to political pressure. But is the market too stupid to know whether rates are being cut because a politician says they should be cut or because economic circumstances, such as a miserable 2 per cent growth in Europe, mean a cut is a good idea?

In order to preserve this mystique of aloofness from the markets, some commentators are suggesting that rates won't be cut at the next ECB meeting, but the one after that. It's entirely childish, but then so is the fact that most people's reaction to the nomination of Hans Eichel as finance minister to replace Mr Lafontaine, was to look up the German meaning of his name. One translation of Eichel is acorn. The other isn't. Since this is a serious commentary on financial markets I cannot tell you what it is, suffice to say it caused hysterical laughter in dealing-rooms throughout Europe.

Anyway, markets have had other things besides Oskar's resignation to keep them amused in the last two weeks - a bout of merger and takeover fever being one of them. Banks have hit the headlines again - French banks in particular, where hostilities have commenced in earnest. The first piece of news was the Societe Generale and Paribas were considering a $16 billion (€14.6 billion) merger. Then BNP whizzed in and made a $38 billion hostile bid for the two banks, a bid which was immediately declared inadequate and lacking in transparency by both SocGen and Paribas and likely to lead to significant job losses. (The job loss card is a good one to play, but do you really think investors care about job losses? Investors don't give a toss about handing out the P45s - the more the merrier, regretfully.)

Meanwhile, the French finance ministry has sent a note to the three banks reminding them to be concerned about national interests. The story doesn't end there, however, since Dresdner Bank is rumoured to be looking at a takeover of BNP and is said to have had informal discussions with both SocGen and Paribas. And Merrill Lynch is also supposed to be considering a $16 billion bid for Paribas, while a completely separate story about Chase being ready to make a bid for JP Morgan and/or Donaldson Lufkin Jenrett hit the wires on Monday morning. Talk about swings and roundabouts. It makes my theory of one big company owning just about everything in the whole world look less fanciful by the hour. Certainly less fanciful than the cashborrowing ritual which took place in Hong Kong at the weekend. This is something I hadn't heard of before but is a kind of "virtual reality" scenario where people borrow money from the Buddhist goddess of mercy. It's something that I'm sure the banks would have liked in the Haughey era - instead of actually receiving cash, the worshippers queue up outside the temple and then pick up a packet from a chest in front of the goddess.

The packets contain a piece of paper on which is written a figure of up to HK$100 million (€12 million). (Maybe this would suit Charlie better now. . .) The amount written on the paper is the amount you have "borrowed" from the goddess. You repay the loan later by making offerings to the goddess. A pretty painless way of borrowing, I guess, although I wonder whether the goddess exacts penal rates of interest if your offerings aren't good enough! In fact, the report I read was pretty vague on the kind of offerings you had to make, but it still sounds like a good idea.

Meanwhile, a good proportion of the Irish market is looking for its fortune elsewhere this week. Trips of various durations have been made across the water to Cheltenham, where there is significantly more chance of making or losing money than there is on the dollareuro rate.

I now realise that when people were talking about volatility last week, they were not talking about oil - which shot up on Friday following an agreement to remove more than two million barrels a day from the market - they were talking about odds on the horses. A market after Charlie McCreevy's own heart.

Sheila O'Flanagan is a fixed-income specialist at NCB Stockbrokers