the bond hole, page-15

Sigh. Extrapolating European debt concerns onto the Australian market is pure nonsense. Then again the market is a dumb herd of cows..... For all the supposed qualifications of those executing volumes.

Funding costs? Tell me Australia's multi-billion dollar banks can't swallow them. Tell me passing on a few basis points is going to kill the economy. Inflation is traditionally great for equities in any case.

Global Demand? Tell me how much Australia exports. Virtually nothing except services outside of resources.

The market just extrapolates information mindlessly, because they figure someone will move before they do, so best move first. It's like the prisoners dilemma in game theory.

Put three people in a room and tell them the EU is being broken up. Each of them can't really factor in exactly what will happen. They look around at each other and wonder what the other guy's is going to do. They figure that the others are wondering the same thing. They figure there's a good chance at least one will sell. So the first guy to act sells first, while the second guys follows ahead of the third guy. So what does the third guy do? If he's smart he buys what they're selling and waits for them to realize they're idiots. If he's dumb he dumps into his gaolers.

Have a good weekend prisoners :)