On Moral Hazard Trade This Week

Christopher Wood, the strategist at CLSA Asia-Pacific Markets, had an excellent closing paragraph in the latest Greed&Fear, I could not resist myself to quote it here, my emphasis:

This has been a good week for investors trading moral hazard. Abu Dhabi threw some money to Dubai’s highly indebted property developer Nakheel, while Japanese bank stocks rallied sharply on word that there would be an extended grace period for banks to meet proposed new tougher BIS regulation for Tier 1 capital. Still all these bailouts and frenetic forbearance are not bullish in the long run. Rather, like securitisation before, they should be seen as a cancer spreading through the system.

Buy the cancer?