Despite optimistic indicators in Canada and the US, stocks have been sliding for the last few weeks. Investors' increasing concerns about Spain, forcing the rise in interest on its bonds to 6%, indicate that the problems in Europe are a long way from over. The same dark financial hobgoblins that haunted Greece a year ago are now returning to claim Spain, a far bigger economy, and the repercussions could be far worse for the global market.
Could this be the start of another slow, painful descent into negative territory for the TSX and other world indices? Are banks cowering in the corners again, afraid to lend their cash because they fear not having the capital to survive a Spanish default? Now we have to worry about our banks' exposure to Spain?
The cauldron that started with massive US debt>>manipulative lowering of US interest rates>>mortgage housing boom>>>subprime manipulations>> banking overleverage >> sovereign bailouts >> sovereign debt >> currency devaluation is bubbling to the sovereign surface, and currency devaluation and/or recession/depression is the only logical conclusion. It seems to be a global phenomenon, with almost every index in the world going down again yesterday. But how severe will it be?
I must admit I am torn between investing more at this stage (a buying opportunity?
), when the TSX is once again below 12,000, or selling in anticipation of another slow, painful sell-off reminiscent of 2008.
We live in difficult times for investors. A penny (well, its a nickel now) for your thoughts.....