Talk is Cheap

While the European Union has been talking about making strides at working out the 3 yr old debt crisis, nothing has actually been done yet.  Germany’s business confidence fell unexpectedly and may be headed into recession;   Spain continues to run into squabbles with Germany and the European Union  on the possibility of a bailout for their banks.  Economic news reinforces the message of lackluster global growth. Even with the ECB stepping in two weeks ago we believe Europe will stay in a recession. The Euro area expected growth for 2013 is approximately .8%.  Although the most recent injection of liquidity on both sides of the pond traditionally calm markets, the government debt as a % of GDP in the Eurozone is still at 90%.   This should persist and cause problems in the capital markets down the road.

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