2012-10-28prudentbear.com

``The Draghi Plan is risky business.  The speculator community was enticed back into European debt and equities markets, and in the process the euro.  But how stable is this finance?  Are the speculators true believers or policy opportunists?  Investors in Spanish and Italian debt were willing to buy, knowing that these high-yielding markets were backstopped by the Draghi ECB.  These markets became a magnet for trading-oriented fund managers looking for immediate performance.  And as markets rallied, the perception took hold that the worst of the crisis had passed.  Global speculators and investors jumped on the bandwagon, believing that more normalized financial conditions would spur a self-reinforcing economic recovery.  In a world of intense investment performance pressure, performance-chasing and trend-following trading strategies ensured large technically driven flows into the region.''


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