This morning the equity markets are taking a major leg down. This is in response to a Portuguese bank missing a coupon payment on a short term piece of debt. If you add in that Israel is putting thousands of ground troops at the border, this is an excuse for the markets to come down from high valuations. Europe’s problems, while getting better, have obviously not gone away. What is apparent, as we have discussed in previous blogs, is that the market has just moved too far too fast. The continued slow growth in the economy, and a premium P/E ratio of 17 times this year’s earnings, is hard to justify. From our perspective: the market needed a pullback to get back down to a reasonable valuation. The additional fear of war between the Palestinians and Israel certainly does not help people feel safe. Granite Group believes this news will bring an opportunity to put equity money to work at more reasonable valuations.