The Punchline To The Last 3 Months Of News
“Sovereign debt fears easing as institutions anticipate Greek default”
Apparently a recent survey found that 92% of institutional investors expect a default in Greece (with 70% expecting it by April). And yet the number expecting an imminent global recession has fallen from 40% to 25%.
If you read the news at all recently you would be forgiven for being surprised by this. It was supposed to be the end of the world “if” there was a default. Now that we’ve switched to “when” it’s business as usual.
Things could have been worse. Maybe a surprise default would have frozen credit across the world, banks would have collapsed, and no one in the world would have a job or a dollar anymore. But investors behave in strange ways. When times are good they are unable to predict any surprises that could negatively affect their plans. And when times don’t look good they don’t stop going through doomsday scenarios and selling everything in sight.
Those who bought when everyone else was running away may be on their way to a quick profit. Unfortunately stock prices continue to rise and we may be headed back to moderately overpriced territory, limiting the great buying opportunities in the near future. What else can we find to scare investors with?