Why Doesn't the Market Like the Bailout?

Now that we have a real Greek bailout, both big enough to cover all refinancings over the next two years as well as approval from Germany, world equity markets are plunging.

What gives? Didn't stock markets rally on every bailout rumor up til now? Maybe it's a case of buy the rumor, sell the news. But that's not the case with PIIGS bonds. The contagion seems worse now than before. The media says it's fears of the Greek debt crisis. But since I've seen that in print about a dozen times, it must be wrong.

Granted, there are still some dangers, such as the German parliamentary vote coming up on May 7th. More than that, though, the size of the bailout, in my opinion has emboldened speculators. They know now that if they push on Portugal and Spain, the bailout needed would probably kill the value of the euro. Rosenberg predicts the euro goes back to $0.85. He sees gold at $3,000 and the 10-yr Treasury under 3% again.

I missed a golden opportunity to buy the SPY 118 May put, but options require patience and you can't jump on the bandwagon with them. Better safe than sorry. Although Russ Winter did tell me the timing was "close enough."