S&P Casts A Wider Net

Bloomberg reported in a follow up of the S&P rating action, that all 17 Euro member nations will be put on negative credit watch.

Still France and particularly Germany are the main drivers of the afternoon slide. As mentioned earlier, the EFSF's credit is only as good as the nations backing it. For sometime the EFSF has been trading (yield-wise) as if it were a AA rated instrument rather then a AAa. So, what does that tell us? The Credit markets may very well have been ahead of the curve again, remember, credit leads, equity (eventually) follows and those dislocations between the two are out opportunity to go short or long the market, in the most recent bounce, it has been an opportunity to get short.