MBS RECAP: 9/12/2011


(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.

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