From Financial Crisis to Fiscal Crisis in 2 years

HOWEVER bad the economic crisis in southern Europe may be for investors, it is proving lethal for the area’s political leaders. In March José Sócrates, Portugal’s beleaguered prime minister, resigned. Soon afterwards his Spanish counterpart, José Luis Rodríguez Zapatero, announced his intention to step down. In June George Papandreou, Greece’s prime minister, came close to ejection during a fierce debate over an austerity package.

So as he stood up to make the first of two eagerly awaited speeches to parliament on August 3rd, Italy’s prime minister, Silvio Berlusconi, may have had an uneasy feeling he was one in a line of dominoes. If so, there was nothing in the style or content of his address to suggest it. Nor was there much to indicate that he appreciated the magnitude of the crisis facing the euro or the case for drastic action to tackle it.

We are moving away from the financial crisis of 2007-2009 and find ourselves in the Fiscal Crisis that makes politicians fleeing responsibilities and seek help: to be bailed out by whom? By the electorate?

Leaders like Angie Merkel suffer on the home front, she is all but disappeared from the headlines, maybe only because of the summer vacations, but I do not think so. Sarkozy, who was bragging in front of French TV, that he was winning 95% of what he wanted from Germany on bailing out Greece. Surely the €75 billions that French banks have invested in Greece are weighing much less than a year ago, but only because € lost a lot in its waist line. And in the USA, lack of leadership, and a weak one has very little to offer in terms of comforting the Wall Street (which has proved often it does not behave much rationally) nor Congressmen who have enough of that Stimulus talk .
It looks to me that while Wall Street shows drops in index, there is a bunch of determined investors who buy sound investment opps on the cheap and will cash in on the at the end of the year just like in 2010 they did.

In my book, no panic, if the double dip comes really there is nothing we can do as Feds are out of most of their bullets(interest is at 0% already).