Weekend thoughts

One should keep a careful tab on with the situation going on with the European debt situation. At this stage, I get the feeling that it has the potential to really spook the markets just like Greece. If the governments make good on their statements to make bond holders take a hit for any restructuring then watch out. It's the implicit assertion that bond holders will not lose out in any bail out that has been holding up the credit markets. Once this changes then you will start seeing money fleeing the PIIGS and that could get ugly. If the recent tape action wasn't so wild and volatile then I would say that the chances of this happening would be slim but this hasn't been the case. There is certainly a degree of risk aversion out there and this has the potential to blow out.