Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (92412)	2/1/2010 4:39:02 PM
From: Real Man	Read Replies (1) of 94695

We'll see. Unfortunately, the monetary response just bought time as derivative markets expanded again. Now the sovereign risk in Europe becomes front news. This undermines so-called risk-free rate, the interest rates on govt. bonds, the low end of which is set by central bankers around the globe. This rate determines the price of every derivative on the planet. The pessimistic scenario is that select country defaults will lead to a country domino effect and there will be soon a synchronized global BK a la Argentina, with sovereign rates soaring around the globe and rather chaotic currency moves. First Greece, then Ireland, Italy, Portugal and Spain, then UK, then US. -ng-

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