Of course, if the six-day move of falling rates becomes a longer term trend, one may be able to set aside worries about the extension of credit coming to a standstill. Moreover, the shares of corporations in the financial sector around the world could see relief rallies.
I am not declaring myself bullish on financial companies. I still believe it is sensible to underweight developed world banks. That said, should the European credit crunch ease, I would be more eager to acquire Asian ETFs that have large financial weightings.
For the last six months, terrific economies with exceptionally solid financial institutions have been held hostage... deemed guilty by association. Indeed, if the credit crunch in Europe continues easing, I'd have a lot more interest in Asia country funds like iShares MSCI Singapore (EWS) and iShares MSCI Malaysia (EWM).