The fact that people in Spain are chanting about wanting to be more like Iceland emphasises something profound that’s happening all around the world.
At all levels, people are talking about now wanting to pay their debts. People want bondholders haircutted in Ireland, the Greeks want to screw the banks, and yes… even in the United States of America, where debt costs are anything but onerous, there are politicians who think that a default and a crisis would be a good thing for the country.
Between that, and growing regulatory scrutiny, the huge underperformance of financial stocks (here’s the XLF vs. SPY) is not hard to understand.
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