The argument goes like this: Everyone and their cousin believes that the Greek bailout is a joke that doesn't stand a snowball's chance in hell of really working. A lot of people thing Greece will leave the Euro this year. And then that opens Pandora's Box for more trouble in Portugal, and everywhere else. And yet! Peripheral yields are calm, and the Euro is robust.
There's a disconnect between what everyone is saying about Europe and what's happening in markets, which is calm.
Or, for that matter,
Investor perceptions of euro-zone borrowers is improving. The cost of insuring Italy’s sovereign debt against default for five years using credit-default swaps has fallen 84 basis points this year to 400 basis points yesterday, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. Similar costs for Spain have slid 115 basis from a record-high touched in November to 378 basis points. The contracts pay the buyer face value in exchange for the underlying securities should an issuer fail to adhere to its debt agreements.Have the numbing details of the talks/bailouts/haircuts cycle just bored investors into not caring or being frightened about Europe? (If it’s boring, can it really be that bad?)
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