Markets offer important information

Investors looking for information to make decisions on have two primary sources: markets and “experts.” Which one they choose depends upon a host of factors, including past history and trustworthiness.
Markets can be fooled. They are subject to extremes and possible short-term manipulation. Bubbles (either overpricing or underpricing) are magnitudes more important than short-term manipulation. When making decisions, markets offer important information.
Despite market shortcomings, if your other alternative for information is politicians, media analysts or “experts,” generally I prefer markets. The reason is simple. The latter group usually has a motive behind what it is selling or saying. They have no “skin” in the game, but do have a desired outcome. If they are wrong, there is virtually no consequence. Markets, however, are driven by profit-seekers with money at risk.
The difference for investors between being right or wrong affects the manner in which their families eat. They may be wrong, but they are at least sincere. Furthermore, if they are wrong too often, they cease to be market participants. A form of Darwinism roots out the bad investors by taking away their capital.
Capital is in short supply and is used carefully. Hot air, the coin of non-market participants, is free and abundant and used accordingly.
Here is an example of where markets are telling one story and politicians are telling another. The political spin is that Europe is resolving its crisis. Market data says they are not.
Below is a relevant graph that shows Eurozone credit default swaps. These are used to insure against credit defaults. When the price is low, it means that markets believe the risk of default is low and vice versa. The cost a year ago was 60. Now it is 220. This market clearly says the risk of default is increasing, not being resolved.

Which source of information is apt to be correct — the political meme or market investors?
We live in a dangerous world where people have reasons to deceive. Foremost in this group are the political elite. Their world is crumbling around them, and there is nothing they can do about it but try to make you believe that everything is under control. It clearly is not.
What happens in Europe will affect the US at a minimum. More than likely it will be a precursor to what occurs here. Be very careful!