Our Love-Hate With Europe

When it comes to Europe I believe Americans have a mixed view on the continent. We have a love-have relationship with the mishmash of countries.

We all love a good crepe from France, but hate that the rumors today that it may be downgraded from AAA rating put pressure on stocks. (Yes, France is still AAA and the US is not.)

We love Italian red wine, but hate the fact their bond yields spiked to new post-Euro levels today. This put pressure on the country and spread around the region and over the pond to the US.

We love Estonia for their fried pigs ears, but hate them for..... Nothing. Who could hate Estonia.

I think you get my point. I would be willing to give up my Italian wine, French crepes, and Estonian pigs ears for the Euro to disappear for a year. Because I believe without the problems in Europe and the attached rumors that go along with the situation that the stock market in the US would be at multi-year highs.

Fundamentally the numbers suggest much higher prices for stocks, but when you add in the "Europe" discount the end result is stocks priced down even though they may have no direct connection to what is happening in the region across the pond.

I am going to use this theory when I put together my 2012 Investment Outlook in the coming weeks. Stay tuned!!