(WSJ) News reports that Italy is in talks with China to buy some Italian sovereign debt have completely turned around the stock market. The Dow has regained about 100 points in a very short period of time and is now down only about 50.
Pop quiz. This is a clear demonstration of:
1. How much of a grip Europe has on our imagination right now
2. How little good news it takes to flip everybody’s risk coaster right back to green
3. How headline-reading robots have completely replaced thinking humans in the market
4. How short our memories are — after all, the ECB has been buying Italian debt for weeks now, without actually solving anything. Will China buying the debt be that much of a help?
5. All of the above
6. None of the above
Update: from the FT by way of Bloomberg, of the talks:
The Italian government is making approaches to China with the aim of selling the cash-rich Asian country “significant” quantities of Italian bonds and investments in strategic companies, FT reports.