As predicted, the G-7 meeting of Finance Ministers and Central Bankers this weekend in France produced another "mealy-mouth" statement, and the world markets are dropping in response. Asia and Europe both dropped sharply overnight, and the futures market indicate the Dow will drop about 140 points at the open, on top of the 303 points lost on Friday.
The stock markets of the world alternate between absolute frustration and almost breathless fascination, at least for a few of us. The world markets are now pricing in the certainty of a Greek default, followed by possible contagion among the PIIGS. Those markets would be at one level without these problems and another level with these problems. What level properly reflects the European crisis?
We are probably very close to reflecting a Greek default only. We are probably very far away from reflecting a collapse of Europe. The optimistic scenario is that the European Union will learn from the Greek default and learn how to govern. The pessimistic scenario is that they will not.
If Armageddon is truly upon us (which I don't believe is realistic), then "watch out below!"
The silver lining is that the Euro is dropping rapidly against the dollar, making it cheaper to take your European vacation . . .
The stock markets of the world alternate between absolute frustration and almost breathless fascination, at least for a few of us. The world markets are now pricing in the certainty of a Greek default, followed by possible contagion among the PIIGS. Those markets would be at one level without these problems and another level with these problems. What level properly reflects the European crisis?
We are probably very close to reflecting a Greek default only. We are probably very far away from reflecting a collapse of Europe. The optimistic scenario is that the European Union will learn from the Greek default and learn how to govern. The pessimistic scenario is that they will not.
If Armageddon is truly upon us (which I don't believe is realistic), then "watch out below!"
The silver lining is that the Euro is dropping rapidly against the dollar, making it cheaper to take your European vacation . . .
