A recent report by ING concludes that a fully-fledged disintegration of the euro zone would cause the worst economic crisis in modern history and could devastate every country in Europe. The trouble is even allowing the club-med countries to exit the Euro does not solve their solvency problems, nor the troubles for the rest of the world who hold their debt.
Similar systemic risks abide in the mounting insolvency of many US cities and states. It is important to realize that the US and the Eurozone are roughly the same size (approx. 14 trillion in GDP each) and represent the two largest economies in the world. Weakness in these regions effects every economy on the planet. (It pains me to post Kudlow, but this segment is a good discussion on this point:)
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Cory’s Chart Corner
Many will focus the blame of market drawdowns on the tariffs and ignore the fact the SP500 (only a few weeks ago) was trading at 4 std devs above its historical mean…valuation also matters.
The Kobeissi Letter @KobeissiLetterBREAKING: The European Union is preparing further counter measures against newly announced US tariffs of 20%, per CNBC.
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