Another bull fight with Europe's dirty debt could be inevitable.
The International Monetary Fund says European bank losses will hit $1.3 trillion by the end of 2010, which is 35% more than the USA. Europe’s banks have been just as reckless as the US banks in racking up the dirty debt that caused the Global Financial Crisis, and potentially could cause a double dip recession in the later part of 2010. The IMF isn’t immune to its own mistakes, it didn’t see or forecast the GFC to begin with so the numbers and forecasts they provide should be taken with caution. The bottom line is you should not be exposing yourself and over committing in any stock, CFD or long term Forex position for the balance of 2010. Markets are still volatile and there are many long term traders that are currently holding no stock whatsoever and sitting on the sidelines to see the balance of this year come to a close.
Back to Europe’s woes. Banks in Europe have poured $2.5 trillion dollars into Greece, Ireland, Belgium, Portugal and Spain. If these countries fail in the next 18 months (and I see no way out for Portugal and Greece) you can be assured it will have massive ramifications for the rest of the world, not to mention the complete failure of the Euro dollar. Ask any German what they want and most will tell you they want the Mark back. Ask most French people what they want and the story is the same. They say “bring back the Frank’. And ask any Brit and they will tell you that they are very glad they didn’t enter the Euro. » Continue Reading »
