Another short note from me as I am preparing for an exam tomorrow...
Last night's market reaction was bewildering, as was that of Greece. Markets rallied slightly when the Prime Ministers in power offer to resign, and form coalition governments. This has been the trend for Greece and now Italy.
What I do not understand is how and why anyone would be happy with that arrangement. If at all, it underscores the lack of political cohesion needed at a critical time, and with a vacuum in political power, personal egos will prevail over the national good. If there was no support for the person who managed to get you your bailout deal, how then is there going to be support in his absence? It is a case of muddying the murky water further.
A few hours ago, something sparked off Italian bond yields to escalate very mugh higher... Perhaps those who thought about it deeper came to similar conclusions as myself? In any case, the ES (S&P500 futures) are -30 pts just before open, about 2.3% down.
Maybe it's time for reality to prevail?
9 November 2011
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