We often say that investors can be bullish, bearish, or not enough of either. “Our debt is clean, we will not have to ask for help,” said Elena Salgado, Spain’s finance minister, on April 30th, appealing to the bulls. That is, if there are any bulls left in sovereign debt.
Currently, there is no shortage of bearish sentiment regarding global sovereign debt issues. In recent weeks, Greece, Portugal, and Spain have all had their credit ratings downgraded, with Greece taking on junk status. Yet despite this flurry of negative news, I would submit that investors are still not bearish enough, particularly on Spain.
Well, the game of Euro-Whac-A-Mole is starting. Soon, England will be joining in…and then, the US.
Here’s a real question mark on the whole thing…when stocks plummeted today, why are gold and silver down too? That is really weird…sort of makes me suspicious of market manipulation. Normally, people flee to precious metals as a safe haven in economic downturns. Yet, someone is dumping extremely large amounts of gold and silver at the exact same time that the stock market is plunging. Cui Bono? The IMF? The FED? Sovereign debtors?