Thursday, November 10, 2011
The eerie calm
The market is more optimistic today, but it just reinforces my belief that sometimes the market is slow to accept what it really doesn't want to, just as it did from late 2006 - 2008. None of the fundamentals changed from yesterday to today. InTrade is currently giving 70% odds to a country leaving the Eurozone by 2015. Knowing that, it's amazing to me that euro bond yields aren't higher across the board. It's very much similar to 2006 when delinquencies on home loans started to rise and were expected to get worse, but no one wanted to believe home prices would fall across the board, or that AAA-rated securities based on those loans weren't as advertised. The 17-country euro zone as we know it is done, it's just a matter of time.