I had a good head and sinus cold brewing this weekend but I thought I had pushed it off. No such luck as my head is killing me and breathing is a conscious effort through my nose. I am exhausted and cranky so as I ponder the pros and cons of Rhinitis medicamentosa to try and be able to sleep, just a quick note.
Fear Threshold Extremely High
Given all the bad news out in the world one would think financial markets would be some kind of worried, nervous, or fearful. It's not happening. What do the markets fear? The Dark perhaps?:
The latest "correction" was brought on at first by buyer exhaustion and then the multi gut punches of:
-Bahrain, Saudi Arabia
-Japan Earthquake and nuclear issues
While any one is pretty big, all together the picture is very bad. So where is the fear?
You have to first know what the market fears, then you can answer.
If you jumped up at the question like Arnold Horshack:
Sit the heck back down, you are most likely wrong.
The old line "the market fears uncertainty" applies, but not in the way you might think. All of the above issues are monster unknowns, but the market could give a hoot.
The last time real fear existed was last summer when the liquidity pump of QE 1 was dry and markets were left on their own. That was the only time I saw any real concern. Even now, what I am looking at are mobs angling to cash in on said above issues, not run from the market.
QE 2 ends this June. Either markets are willing to party right up until then, or they are pricing in more intervention (via QE 3 or some other pet invention of central bankers).
Japan is only an issue if Japan will not print. Portugal and Ireland bond yields at record highs are only an issue if they cannot be rolled over by the ECB by printing. You get the idea. The reason the market is not afraid is because they have no reason to be.
Have a good night.