Nuclear Melt-Up, Part 4

There is no bad news in the financial markets anymore.  Stocks now shrug off primary evidence that Europe is collapsing into a debt crisis.  Portugal was downgraded two steps to A1...and nobody cared.

Investors do not see Portugal's rating downgrade by Moody's as an event that will shake the markets, but it confirms the fact that the outlook for some economies in the euro zone is still cloudy, economists and market analysts told CNBC Tuesday.

Moody's slashed Portugal's credit rating by two notches to A1, citing a deterioration of the country's debt ratios and weak growth prospects.

Portugal's debt-to-GDP and debt-to-revenue ratios have risen rapidly in the past two years, Anthony Thomas, vice president and senior analyst in Moody's Sovereign Risk Group, said in a statement.

That should at least affect European stocks, right?  Nope.

European stocks rose, shrugging off the downgrade with investors optimistic after Alcoa's positive start of the US earnings season. US stock index futures were also up.

"It's a blow to Portugal but it’s not a major shock," Ken Wattret, chief euro-zone economist at BNP Paribas told CNBC.

Everything's fine!  We're all great here!  Here's the bigger question:  why is Portugal's credit rating being slashed, and why are Greek bond interest rates increasing after My Big Fat Greek Bailout?  Doesn't this mean the trillion bucks thrown at the Euro Zone isn't working, and that like the US bailout, it was too small?

And stocks are up worldwide.  There is no rationality anymore.  We're in the Melt-Up.