A dead cat bounce before the real storm?

by Lars Tong Strömberg on July 5, 2011

Enjoying vacation in the sun spending some time reading about the latest global financial developments. In my point of view, the markets are recovering surprisingly fast from the Greek turmoil from last week and it seems the bulls are back on the street once again.

But for how long? Personally, I am quite pessimistic about the global economy considering how slow the recovery has been in the US recently and the tendency among leading politicians in the US and in Europe to keep kicking the national debt cans down the road.

With media focus entirely on Greece, it should be pointed out that the problems are far from over in the other PIIGS countries. In the case of Spain and Italy, the sizes of the economies and the potential domino effects defaults on national debt would have in these countries are enourmous compared to Greece.

The really big worry though in terms of sheer potential economic impact is of course the US. Although section 4 of the 14th amendment possibly could save the imminent debt ceiling scare, just having to refer to interpretation of a clause in a document written over 140 years ago in order to save the pressing situation, does not give credit to politicians in the US.

Overall then? Just how bad is the situation right now? Well, continuing on the “documentaries worth watching” track from my blog post on Chernobyl, I can strongly recommend spending some time on this one:

 

{ 1 comment… read it below or add one }

Daniel Kjellsson July 14, 2011 at 7:48 am

Fascinating! (And also fascinating that I’ve never before heard of this “Journeyman”.) I’ve also been digging into this subject for some time. And the most difficult thing I think, is the fact that stuff just seems so survive. No one can question the fact that there’s a bubble coming, but if you’re (for example) an investor with a five or ten year horizon – should you bail or just stick with it? Money invested in “non bubble activity” and done so with a longer horizon, always seems to make it. Or…

Leave a Comment

Previous post: