European Crisis IntensifiesBy Bert Dohmen
Saturday, August 20th, 2011
August 18, 2011
Last week the global markets appeared to be in FREEFALL! The European leaders demonstrated that they were incapable of finding a solution to the accelerating sovereign European debt crisis. The stocks of the large banks plunged.
Investors and the bullish investment professionals appear to be in shock. Should it really be a surprise?
Several days ago, after the high level meeting between Merkel and Sarkozy in Paris, renowned analysts Bert Dohmen, called the outcome “DISASTROUS.” He predicted the market would not like it.
Here is what BERT DOHMEN wrote on August 16 to his valued clients:
I feel these bland statements and inability to do something are incredible. The markets were waiting for the problems to be addressed, and apparently these two leaders just met for tea. The markets won’t like that.
Those statements remove any hope of a solution in the near future. And that means that the markets will once again go into defensive crisis mode.
But it gets even worse. Merkel and Sarkozy announced the revival of a proposal for a European bank transaction tax. The headline in March of this year was: European Union lawmakers overwhelmingly backed a call to tax financial transactions on Tuesday and make banks pay up to 200 billion euros ($278.3 billion) for damage they caused to the economy.
Today’s Merket/Sarkozy announced: “The French and German finance ministers will table a joint proposal at the EU level next September for a tax on financial transactions. This is a priority for us.”
This is totally the wrong time for such a tax. In the time of crisis, turmoil, and uncertainty, with banks loaded up with hundreds of billions of dollars of bad loans, the top politicians want to impose another burden on the financial sector. How can that resolve the increasing European debt crisis. It can only make it worse. Is that want they want? The mind of a politician works in mysterious ways. Dohmen wrote on that day: “today’s announcement from Europe is disastrous.
BERT DOHMEN says that the US recession will now start getting more attention. as the evidence can no longer be ignored by the Polyannas in the economic establishment. DOHMEN states we entered a recession in May of this year when the May 9 issue of the distinguished WELLINGTON LETTER was headlined: “RETURN OF THE DOUBLE-DIP.”
He cautions investors that something similar to the 2008 CRISIS, this one focusing on entire countries, is highly likely in the autumn.