In my last post of March 23 I shared my view of how bearish I felt then and called that time as 'the beginning' of new deflation era. Things really got bad in the meantime and stock and commodity markets around the world have fallen sharply. The ostensible reason is Greek crisis but I do not understand the logic at all! If the markets are falling in panic because of Greek crisis then why were they going up like no tomorrow just a month or so back? Situation in Greece and fear of a crisis there is not a news anymore! For at least few months mainstream media is full of Greek debt problems and I did not see many analysts optimistic about some painless solution. So, if it had to be this Greek Crisis as actual cause behind current market meltdown then we should have seen at least six months of bearish trend. No, its NOT the Greek Gods that are responsible, in my opinion, its what had to happen and Greece is just an excuse.
However, my point today in this post is yet another foolish attempt by governments across Europe to 'stabilize' the system. European leaders gathered in an 'emergency' meeting today and decided to take 'measures' that will 'contain' this crisis from spreading over and save Euro, reports Bloomberg. How they do it? They have decided to set up an 'emergency fund' to 'halt the spread of Greece's fiscal woes' ! OMG! Where were they and doing what for so long? Mistakes after mistakes is what politicians do to 'show' their 'abilities' of 'preventing' problems and they mostly end up being problems themselves. Markets will do what they will do no matter what these leaders do.
However, I don't criticize their 'efforts' for one reason. These leaders have to show they are 'at least' doing something even though they know the outcome. They just can not sit down and wait for things to happen as majority of general population want their leaders to take steps. This is more a political compulsion than need of the hour. Let us see how things turn out.