So much has been written about the European financial crisis that I doubt I can contribute anything.
But I am struck again, as I was with the U.S. housing bubble, by the need to be highly skeptical of the authorities. Alan Greenspan and Ben Bernanke dismissed concerns about the consequences of the housing bubble in the U.S.--and later of the collapse of Bear Stearns.
Now in Europe, as concerns have shifted to Spain (after Ireland, Greece, and Portugal), the authorities have similar, dubious credibility.
The Spanish Prime Minister had recently estimated that the capital shortfall of the entire Spanish banking system was no more than $19 billion. But one bank alone--Bankia--required $24 billion in additional capital.
Developments in Europe do indeed seem to be, as one observer noted, "like a slow-moving train wreck." But I continue to think that stock market sentiment had become so depressed that a significant rally is likely, especially in the U.S.
S & P 500: 1324