Equity markets continue to be trapped in the whirlpool of desperate rescue operations against debt crisis and a weaker economy

Not only the captains’ nervousness in the deb-stricken Europe but also the Fed’s steps against an economy that – during an election year! – is not getting off the ground is affecting financial markets world-wide to an extent that has become unbearable for “classic” investors. Apart from unforeseeable hiatuses and tremendous sporadic swings, another phenomenon becomes apparent: The enormous flooding of the financial systems on both sides of the Atlantic with practically interest-free liquidity has become the driving force of market-rallyes. The development on the bourses has largely decoupled from a real economy that would rather urge caution. Low turnover figures reveal the fact that only a selected bunch of venturesome traders are taking part. “Classic” investors seem to stay on the side-lines. These “bold” traders seem to completely blind out the actual political and economic risks. But how long such “happy-island turned” markets will be able to hold remains to be seen. I shall provide some information for brave investors wishing to try their luck with a limited amount in the last paragraph of this report.

Is the showdown in the Euro-debt crisis imminent?

Until now, policy stake holders have succeeded quite well in kicking the can further down the road and raising hopes again and again with a high rate of summits. Even the bombshell of downgrading a large number of Euro zone-countries by Standard & Poors could be defused surprisingly well. But now, I have the impression …

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