How Global Stock Markets Reacted to the Greece Crisis Resolution

One of my favorite website, Bespoke Invest, has a nice rundown on the performances of 78 world equity benchmarks this week highlighted by the Greece vote on crisis resolution measures.

As expected, most of the benefits accrued to markets that had been most sensitive to the risks of a Euro crisis contagion.

The Philippines have seemingly been indifferent (but not today where the Phisix rose 1.4% to breakout from the massive reverse and shoulder pattern)

But what I find interesting is this comment.

From Bespoke (including chart) [bold emphasis mine]

Looking at year-to-date performance, Bangladesh is down the most with a decline of 26.21%, followed by Peru at -19.20%. Other countries that have really struggled so far in 2011 include Finland, Oman, Malta, Kuwait, Kenya, Vietnam and Brazil. With so much attention being paid to the problems in Greece, you would think that its stock market would be getting absolutely crushed this year, but it's currently down just 9.54%. This obviously isn't a positive number, but it's at least better than ten other countries on the list.

This is true.

I’ve seen many people soooo fixated by the Greece crisis such that they almost see the end of the world take place. This I argued successfully against.

In behavioral science this known as the focusing effect, where people transfix their attention to one event at the expense of the rest.

Black Swan author Nassim Taleb calls this tunneling or “uncertainty of the deluded”

People who tunnel on sources of uncertainty by producing precise sources like the great uncertainty principle or similar, less consequential, matters to real life, worrying about subatomic particles while forgetting that we can’t predict tomorrow’s crises.

Such focusing effect/tunneling vision seems so elaborate on people whom are plagued by political and or economic creeds or those who see the world rigidly in the prism of their (self-righteous) designs and who interprets evolving events that gives much weight on the short term or present oriented actions.

And this is why obsession or getting married to a view/theme can lead to blindspots that can be very fatal.

Aside from the global rally in equities, the Euro-Gold correlations, both have substantially been rallying, have once reaffirmed its relational harmony in defiance of the world according to these ideologues.