friday's stage set, page-27

Just a step away from the technical picture for a moment (apologies to anyone who takes offence)

It will be interesting to see whether the market continues to react to soverign debt concerns. Bill Gross is a very influential person, being the head of Pimco the worlds largest bond fund. He is a very smart man, and i have no doubt he has positions in place to benefit from his comments last night.

It is obvious that the market is no longer that concerned with specific systematic risks, as they're comfortable the govt/fed will bail out or sit on the bid in credit markets or just print money.

The real elephant in the room though is if the world loses faith in the governments themselves - through soverign downgrade, increased interest rates and lack of appetite for govt paper. If this were to truly happen all of the bail outs, money printing and back stops would count for nothing.

This is exactly why you need to be wary of all of the green shoots talk, and talk of repeat patterns of 2002-2003. The circumstances and the severity of the issues are vastly different this time around. They have papered over some cracks very successfully, but there is a great risk there are far bigger cracks developing elsewhere