If you missed the September 9 opening weekend of "Contagion" -- the big-budget thriller about a deadly pandemic spreading across the world -- don't worry. You can see the non-fictionalized version play out in European financial "theaters" right now.
Those top-tier nations once deemed immune to the sovereign debt crisis that first flared in Dubai, then Iceland two years ago are now experiencing the all-too-familiar symptoms of acute debt downgrades and painful market declines. On this, a September 12 CNBC article captures the panic to grip the recently downgraded banks of France and Germany:
"This is a shock that easily spread around the world quickly. There is no place to hide from this. German banks are no safer than Greek ones in this disaster scenario."
One by one, the mainstream's string of "us-not-them" exemptions has unraveled at the seams: "Iceland isn't Dubai." "Greece isn't Iceland." "Ireland isn't Greece." "Portugal isn't Ireland." And now, "France and Germany aren't Greece."
The usual crisis models left the economies of the world utterly exposed and without any forewarning of the coming contagion to institute protective measures to ride out the crisis.
Here at Elliott Wave International, we had that need covered from the beginning. To wit, in the December 2009 European Financial Forecast -- that's almost 2 years ago, when any contagion talk was a complete heresy -- then editor Brian Whitmer presented the following bearish picture of the PIIGS stock markets and warned against a premature celebration of economic recovery via this telling insight:
A European Tinderbox: The binding characteristic of the economies of Portugal, Italy, Greece and Spain is that each country is a full fledged member of the eurozone. This means the economic pain in Southern Europe influences the euro's perceived safety. And to be sure, Southern Europe will destabilize as the next leg down gains traction. The five-down, three-up structure of the region's equity markets since 2007 argues unequivocally that more weakness lies ahead.
.GIF)
Soon after, the February 10, 2010, European Short Term Update offered its first-ever analysis of Ireland, warning that it would be the next falling domino in the eurozone crisis. And finally, the March 2010 European Financial Forecast dispelled any notion that Greece's economic troubles would be an isolated event:
"Like Dubai's debt problems, the Greek tragedy appears to be contained for now but social mood across Europe is again declining. Greece's woes aren't over and neither are its neighbors. Meaning more surprises are sure to come."