So said the media, but note that Greece and Portugal were doing remarkably well only three months earlier. Then, "suddenly and without warning," global investors furiously dumped their bonds. Why? Weiss and other commentators blamed a sudden "contagion of fear about sovereign debt." But as Bill Murphy, another prolific newsletter writer, reiterates, "Price action makes market commentary." The pundits look at what just happened in the market and then dream up some plausible theory to explain it. What President Franklin Roosevelt said of politics, however, may also be true of markets: "Nothing happens by accident. If it happens, you can bet it was planned that way."
That the collapse of Greece's sovereign debt may actually have been planned was suggested in a Wall Street Journal article in February, in which Susan Pullian and co-authors reported:
Some heavyweight hedge funds have launched large bearish bets against the euro in moves that are reminiscent of the trading action at the height of the U.S. financial crisis.
The big bets are emerging amid gatherings such as an exclusive 'idea dinner' earlier this month that included hedge-fund titans SAC Capital Advisors LP and Soros Fund Management LLC.
There is nothing improper about hedge funds jumping on the same trade unless it is deemed by regulators to be collusion. Regulators haven't suggested that any trading has been improper.
The personal blog of filmmaker Dimitri Vorris.