It would appear that the credit markets both anticipated and began to price in what is now the worst recessionary period for the European Union on record a few days ago. However, their exuberant, ever-hungry colleagues over in equity land remain in the bad is good mode and can't get enough of these higher prices. Where ever we look around the developed world, equity prices are lifting as credit deteriorates. The masses ignored these lessons in 2007 [4]; are they ignoring it again? Or is this just another short-term divergence? If so, it is bond-buying time... if not, take your equity profits now because these divergences are unsustainable.
European stocks and credit...
[5]
US stocks and credit...
[6]
Sovereigns ain't buying it?
[7]
[8]
and protection is bid...
[9]
Charts: Bloomberg