STUPIDity At Widest Since April 2009, As Dollar Surges On Europe Contagion Fears Flare Up
After the earlier announcement of record risk in Portugal, it was only a matter of hours before the epicenter would feel an aftershock. Indeed, Greece CDS is now back to over 400 bps, after tightening under 370 bps yesterday. Those poor protection sellers just can't catch a break. The dollar flight to safety trade is on again. Lack of robotic volume means the stock market has yet to digest what all this means. Lastly, in pursuit of an efficient sovereign risk market, STUPIDity is now back to April 2009 levels.
Dubai, never one to be left out of the sovereign default party, spikes sympathetically by 10 bps. FX traders are watching this, and puking, both literally and metaphorically.
What all this means is that STUPIDity is now back to April 2009 levels, courtesy of the proprietary STUPID sovereign risk index. And rising. We expect STUPIDity to hit record highs soon enough.
with Credit Trader